Muras Matters: “Record Payments” to HMRC Informants

“Record Payments” to HMRC Informants

You may have seen figures quoted in the media over the weekend suggesting that in the 2014/15 tax year over £600,000 was paid by HM Revenue & Customs (“HMRC”) to informants and that this is a record high. The reports indicate that this only reflects informants who actually received a payment, most informants do not receive anything in return.

Information Sources

HMRC have huge amounts of information at their disposal in order to detect tax evasion including:

  1. Informants – through a dedicated hotline or online
  2. Social media and websites including Rightmove, Ebay, Amazon and Google Earth
  3. Banks, building societies and credit card providers
  4. Mortgage applications
  5. Letting agents
  6. Planning applications
  7. The Land Registry
  8. Council Tax records
  9. The DVLA
  10. The Electoral Roll
  11. Companies House
  12. Information sharing agreements with many other countries

The information provided by these sources is cross checked continually by “Connect” which is a computer system designed for HMRC by BAE Systems. Connect cross checks billions of records to information provided by taxpayers to HMRC to see if information is missing or incorrect.

Checks which previously would have taken a Tax Inspector time to complete can be performed in seconds. Connect is constantly being added to as the sources of information are updated, and under ‘discovery’ provisions HMRC can use new information to assess tax up to 20 years previously.

Tax Investigation Service

Due to the additional information at HMRC’s disposal, it is now even more important to guard against the professional costs required to deal with an enquiry. Our Tax Investigation Service covers our fees in the event of an enquiry or even routine compliance checks.

If you are concerned about under declared tax liabilities or if you are happy your tax affairs are up to date but want to take out our Tax Investigation Service in the event you are selected for enquiry then please contact our Tax Director, Jenny Marks.

To see our other news items please visit our Muras Baker Jones – Blog.