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Bloomsbury Professional, a tax and accounting information group, says that HMRC handles an average 350 calls to the tax evasion hotline per day, which it sees as an indication of the public’s growing concern over tax evasion. There is also a question mark over how effectively HMRC can investigate this number of reports.
The Tax Evasion Hotline allows members of the public to inform HMRC of suspected cases of tax evasion. They can report this via either the telephone or online.
Martin Casimir, Managing Director of Bloomsbury Professional, said: “The number of calls the hotline is receiving is astonishing. It’s clear that people are very keen to ensure that no one cheats the tax system and everybody pays their fair share.”
Over-zealous
However, the high volume of calls does not necessarily mean that large amounts of tax will be recouped through investigations.
Mr Casimir said: “People are now more aware of tax irregularities but this awareness can lead to an over-zealous approach to reporting suspected tax evasion. This is likely to have led to the big jump in the volume of calls the hotline receives.
“Given HMRC’s restricted budget, there is a question over whether it has sufficient resources to properly investigate the 350 calls a day that it receives.”
As well as being coping with the high number of calls, many of the calls that HMRC receives reveal only small amounts of tax evasion.
Mr Casimir said: “HMRC should be concerned about the low number of calls that actually reveal any notable tax evasion.
“It’s a rarity that calls to HMRC reveal a large-scale tax evasion. For example, many of the calls relate to tradesmen asking to be paid in cash. In this case the loss of tax for HMRC is rather small.
“Investigating tax evasion cases can be costly. The Revenue has to weigh up the value of the potential tax reclaimed versus the cost of actually pursuing the claim. It is also worth remembering individuals or businesses that are found not to owe any additional tax are usually not entitled to compensation so fighting tax claims can prove extremely costly.”
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Susie Hughes © Shout99 2014
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