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Over 100,000 reports of tax evasion made to HMRC’s hotline during lockdown

Publications featured in include: Daily Telegraph

The surge of reports is likely to be driven in part by HMRC opening a 24/7 ‘Covid fraud hotline’ in October 2020. The hotline allows people to anonymously report suspected fraud in relation to Covid support schemes such as furlough.

Since the last recession, tax evasion has become a much higher profile issue and is viewed as increasingly unacceptable by the public. As a result, more individuals are willing to report those who are deliberately underpaying tax. 

HMRC’s usual tax evasion hotline was closed for the initial four months of the pandemic, as resources were redirected to implementing the furlough scheme. 

The tax authority’s postal tax evasion reporting service has also been suspended for the past year to help prevent the spread of the virus. Reports would have been even higher if these services had remained open

HMRC has estimated that for the furlough scheme alone, up to £3.5bn of fraudulent or mistakenly claimed money will need to be recovered**. HMRC has also received over 28,000 reports of suspected fraud purely in relation to the furlough scheme***.

Phil Kinzett-Evans, Partner at our Newbury office, says: “This is a remarkable number of reports of tax evasion, given that individuals were deprived of the opportunity to make reports for a third of the year.

In the past, more people might have chosen to turn a blind eye to tax evasion, thinking that it was none of their business. Over the last 15 years, people have generally come to accept that paying your taxes honestly is a responsibility everyone shares. Fewer people feel guilty about reporting those who don’t.

Individuals that have been involved in tax evasion ought to make a disclosure to HMRC at the earliest opportunity and seek specialist advice in the process. HMRC will be far less sympathetic towards those that deliberately conceal their tax affairs and choose to keep quiet.”

* HMRC, year end March 31 2021 
** HMRC, September 2020
*** HMRC, June 2021

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