Insights

Does HMRC investigate all tip-offs?

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Holborn Adams

October 14, 2024


Do you suspect someone has tipped off HMRC that you or your business has tried to commit tax fraud? Whether or not the allegations are true, you will be anxious whether HMRC will pursue the tip-off, causing you to become the centre of a stressful HMRC investigation.

In this article, we’ll discuss whether HMRC investigates every tip-off it receives.

 

Does HMRC investigate every tip-off it receives?

No – HMRC does not have the resources to investigate every single tip-off it receives. Instead, they assess each tip-off and prioritise investigating ones they think will lead to more fruitful findings.

 

How does HMRC decide which tip-offs to investigate further?

There are multiple factors HMRC considers when assessing tip-offs:

 

Credibility of the source

If they know the identity of the person tipping off, they assess whether it’s credible that they would have access to this information. For example, a current or ex-employee of the company would likely have access. They cannot verify whether an anonymous tipper would. They also consider whether the tipper may have a personal agenda which could affect the credibility of the tip, even if it’s reasonable they would have access to such information.

 

Specificity of the tip

A vague tip-off is less likely to be pursued than one which states actual facts, figures, and names. HMRC can cross-reference specific information with data they have access to, making it easier to decide whether it’s worth pursuing.

 

Seriousness of the allegation

How serious is the suspected tax fraud? Is it hundreds, thousands, hundreds of thousands of pounds – or more? HMRC will choose to investigate tip-offs which suggests a substantial amount of money is involved.

 

Relation to existing cases

A tip-off may relate to an existing investigation. HMRC are likely to pursue these tip offs as it may make an existing investigation easier and quicker.

 

Relation to existing campaigns

HMRC carry out campaigns investigating tax evasion in specific industries. If the tip-off relates to a business in this industry, they are more likely to act on it.

 

Current resources and priorities

HMRC will consider whether they have the resources at that time to pursue the tip-off. They always endeavour to recuperate as much money as possible, so if the tip-off doesn’t relate to a reasonably substantial amount of money, they may choose to leave it. Similarly, if the tip-off appears to be time-sensitive, they are more likely to prioritise it.

How do you know if HMRC are investigating you?

If HMRC pursues an investigation, they will alert you – you can find out more in our article “How do I know if HMRC are investigating me?”.

 

How likely is it that I’ll be investigated by HMRC?

The likelihood you’ll be investigated by HMRC is based on a combination of information they uncover using their specialist software, tip-offs, and random selection. Where they find a reasonable amount of evidence, they’ll investigate a company.

 

Worried about a tip-off to HMRC about you or your company?

If you know or think that someone has tipped off HMRC about the state of your taxes, it’s undoubtedly a stressful situation. If you know you have not done anything wrong, then you can rest easy.

If you feel that HMRC will uncover issues with your taxes, it’s important to seek professional help. At Holborn Adams, our tax fraud solicitors know exactly how to handle cases like these. You’ll be protected by legal privilege, meaning all of your communications with us are confidential. We can instruct tax experts who will also be bound by legal privilege – you wouldn’t get this if you spoke to them independently.

Speak to Holborn Adams today so we can work together on the best steps moving forward – we want to clear your name or secure dramatically reduced penalties. The earlier we intervene the better.


Holborn Adams

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