HMRC pays £1m in bounty money to tax informants

HMRC pays £1m in bounty money to tax informantsMore than £1 million has been paid to informants who passed information about illegal tax management to HM Revenue & Customs.

The biggest payment was £100,000 paid to the whistle-blower who handed over details of confidential bank accounts and investments held by British taxpayers in Liechtenstein.

HMRC estimates nearly 70,000 people phoned and emailed tips to a special tax hotline last year – with many coming from former spouses, business partners and neighbours.

HMRC revealed most payments are for just £50 or £60 – and are made following calls to the hotline.

An HMRC spokesman confirmed bigger payouts would go to anyone giving information leading to the recovery of larger amounts of unpaid tax.

“It can range from someone who has heard someone bragging in the pub about work they have done cash-in-hand, to details of someone shipping in lorry loads of vodka with paying tax,” said the spokesman.

“The system works in the same way as Crime Stoppers – sometimes there will be cash rewards to help persuade the public to come forward. Officers review all calls and must decide which ones to open investigations into, watching out for malicious and incorrect information.”

The payments are based on how much unpaid tax is recovered, but HMRC has no formula or fixed percentage for calculating the reward money.

HMRC says £374,000 was paid-out in 2011-12, £309,620 in 2010-11, £384,110 in 2009-10, £281,000 in 2008-09, and £155,950 in 2007-08.

Other countries also pay bounty money for information about people not paying tax – the most notable was an undisclosed payment by French tax authorities who bought thousands of names and bank account details of HSBC and UBS customers in Switzerland.

HMRC reckons around £42 million of tax was recovered from information passed by informants between 2005 and 2009.