Will the taxman pay 30% commission?
According to London law firm RPC, payments made by the UK tax office to tax informants for the year to March 2015 have hit a record high of £605,000.
This is a 50% jump compare to 2014 and is partly driven by a rise in awareness about HMRC’s efforts to track down tax evaders. No doubt high profile cases reported in the media play a role.
According to the research, the typical profile of an informant has changed. As well as former employers and ex-spouses, there are more individuals working in financial and professional services providing information, in the hope that they will receive payment.
The background to all this is the tax office being under extreme pressure to a) make the most of information that is offered to them and b) increase the tax yield.
In the US, the tax office is called the IRS. They have an explicit policy of paying whistleblowers up to 30% of any additional tax, penalty and other amounts they collect.
Could that be introduced in the UK?
It is a possibility because it appears as if our tax office are being inspired by the IRS enquiry procedures.
The announcement of a digital tax account is consistent with the tax office redeploying people from administration into investigation. Now more than ever we recommend to clients they be covered by our tax investigation solution.