Some 107,000 suspected cases of tax evasion were reported to HMRC in the 2020-21 tax year, despite the Revenue’s whistleblowing hotline being closed for almost five months at the start of the pandemic.
Many of the reports were made via HMRC’s anonymous ‘Covid fraud hotline’, which it launched in October 2020, according to accountancy firm UHY Hacker Young. It said many of the reports related to schemes set up to support businesses through the pandemic, such as furlough and the Self-Employment Income Support Scheme
29,000 employers said to be cheating furlough scheme
By June 2021 HMRC had received almost 29,000 reports of employers allegedly cheating the Coronavirus Job Retention Scheme (furlough).
HMRC has estimated that for the furlough scheme alone, up to £3.5bn of fraudulent or mistakenly claimed money will need to be recovered.
The Government did, however, launch a dedicated 24/7 hotline in October last year to encourage taxpayers to anonymously report suspected fraudsters targeting Coronavirus support schemes.
‘Remarkable’ number of tax abuse claims
UHY Hacker Young’s Phil Kinzett-Evans said the number of reports made during the pandemic was “remarkable” given that the public was unable to use the established whistleblowing hotline for over four months.
He added: “In the past, more people might have chosen to turn a blind eye to tax evasion, thinking that it was none of their business.
“But in recent years people have generally come to accept that paying your taxes honestly is a responsibility everyone shares, and fewer people feel guilty about reporting those who don’t.”
Tax evaders urged to come clean
While the latest figure is 3% down on the 110,848 whistleblowing reports received by the taxman in the 2019-20 tax year, UHY Hacker Young said the figure would have been a lot higher had the hotline been open for the full 12 months.
Kinzett-Evans said: “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.
“The taxman will be far less sympathetic towards those that deliberately conceal their tax affairs and choose to keep quiet.”