01/09/20

UK: Tax evasion whistleblowing rises 10%.

As published on accountancytoday.co.uk, Tuesday 1 September, 2020.

The number of tax evasion whistleblowing reports made to HMRC has increased by 10% in a year, according to the latest data from UHY Hacker Young.

The number of whistleblowing reports rose from 66,000 in 2018/19 to 73,000 in 2019/20, which the firm attributes to a “steadily increasing view amongst the general public that tax evasion is unacceptable behaviour”.

According to the firm, tax evasion has now become a higher-profile issue amongst the public in the “post-recession austerity” of the last decade, with people “now more willing to report those they believe are not paying their fair share”.

It added that furlough scheme fraud is “likely” to drive the number of whistle-blowing reports up even further in the coming year.

More than 4,500 employee whistle-blowers had already alerted HMRC to the fact their employer may be abusing the furlough scheme by July 1 2020, for example.

In addition, their increase was also attributed to the fact that duty accountants now have to report all potential cases of tax evasion under the ‘failure to prevent tax evasion’ regulations, facing serious financial penalties or potential criminal proceedings if they do not report suspect finances.

It comes as UHY Hacker Young said that HMRC is increasingly viewing whistleblowing reports as a way of “generating valuable leads” on potential cases of tax evasion and fraud.

Sean Glancy, partner at UHY Hacker Young, says: “It appears that more people than ever are choosing to report a neighbour, employer or business partner for tax evasion.

“The financial pressure some people have been under in recent years may have affected whether they are willing to report someone they know, even if they haven’t directly been impacted by the tax evasion.”

He added: “Tax evasion whistle-blowers are a vital source of information for HMRC. ‘On the ground’ intelligence is critically important in helping HMRC target its use of the vast amounts of data it holds on taxpayers.”

“Accountants and other advisers are also now a ‘first line of defence’ for HMRC against tax evasion. Professionals are now taking no chances in reporting any suspicions they have that a client is hiding income or assets from the taxman.”