Disgruntled Divorcees Whistleblow on Ex-Partners
October 30, 2012 Taxation in UK
LONDON – The UK is encouraging divorcees and former business associates to dob in their tax evading ex-partners in exchange for cash rewards.
In an interview with the newspaper Daily Mail on October 29th the tax partner at the UK law firm Reynolds Porter Chamberlain Adam Cragg said that new documents obtained by the firm from the HM Revenue and Customs show that UK tax authorities are increasingly paying rewards to individuals who submit anonymous information about tax evaders.
According to Adam Cragg, the cumulative amount of payments made by the HMRC to informants who offered information on suspected cases of tax evasion increased by 21 percent during the year, from approximately GBP 310 thousand to GBP 374 thousand.
Elaborating on where the HMRC receives the information, Adam Cragg said: “…typically, an HMRC informant will be an angry spouse during divorce proceedings. For the spouse, threatening to supply information to HMRC provides them with some leverage during divorce settlement negotiations. If the divorce is particularly acrimonious, it is not uncommon for a spouse to turn HMRC informant.”
He added that disgruntled ex-business partners also often contact the HMRC with data on the illegitimate tax affairs of their former associates.
Under current rules, informants must explicitly request a reward from the HMRC in order to receive any payment, and the size of the payment will be determined by the HMRC’s Affluence Unit in each particular case, with no set standards for payouts.