Over 300 calls were made to HM Revenue and Custom’s tax evasion hotline in the last year, according to a freedom of information request made by book publisher Bloomsbury Professional. The hotline fielded over 72,000 calls during the twelve months until May 2012, many of which were placed multiple times.
The hotline is an anonymous service designed to increase reporting of suspected tax evasion by the general public. With wage growth somewhat stagnant and economic opportunities limited, experts believe that the increase in tax evasion reports is due to an increased feeling of frustration and concern about potential tax evaders.
Despite the service’s incredible popularity, many in the tax auditing industry believe that it’s failing to meet its obligations in prosecuting tax evaders. The National Audit Office claims that the phone line is an inefficient, overly expensive method of finding tax cheats, and that traditional investigations are far more cost-effective.
Their findings seem to be backed up by the phone line’s own figures. In 2006, the tax evasion hotline brought in approximately £2.6 million in revenue for HMRC – a little more than twice its operating expenses. HRMC had projected claims of £26 million, a figure that far exceeds the tax evasion hotline’s actual income.
HMRC takes numerous steps in fighting tax evasion, including offering cash rewards to members of the public that report high net worth offenders. People that give tips on suspected tax evaders have reportedly earned tens of thousands of pounds from the government department, which is paid after tax payments have been recovered.
Despite failing to reveal large-scale cases of tax evasion, the hotline remains popular amongst tax advocates and the general public. Given the extent of many tax scandals in recent years, we could see an increase to the astounding 72,000 calls made to the hotline over the past year.
