HMRC crackdown on furlough fraud

HMRC made over 18,000 requests to view phone records and web histories in investigations last year

New data shows HMRC made 18,263 requests last year to access communications data, such as phone records and web browsing histories, as part of its investigations into taxpayers.

This represents a 59% increase on the number of requests for communications data made by HMRC in 2010, showing that communications data is regularly being used by HMRC as key evidence in establishing whether tax evasion or avoidance has taken place.

HMRC can request to view data held by telecommunications operators and providers. This could include the time, duration and location of any phone call made. HMRC can also request to view the number dialled.

Additionally, HMRC can ask internet providers to provide data on which websites an individual has looked at. Requests for this information are made to the Office for Communications Data Authorisations.

Furlough fraud

Furlough fraud is likely to lead to more requests for communications data by HMRC. Over 21,000 employees have already made use of HMRC’s hotline for furlough fraud, which was specifically set up for employees to blow the whistle on employers cheating the furlough scheme.

HMRC’s own internal estimates also show that up to £3.5bn may have been fraudulently claimed through the furlough programme. The body is likely to want to investigate as many cases of furlough fraud as possible, with communications data potentially crucial evidence for HMRC.

HMRC will likely look to view phone records of employers suspected of committing furlough fraud. By viewing these, HMRC will be able to establish whether employers have been making calls to employees when they were supposedly on furlough. If multiple calls have been made during working hours, this could indicate that an employee was actually working and any furlough scheme claims made were fraudulent.

What data does HMRC collect?

Communications data is only able to provide the ‘who’, ‘where’, ‘what’ and ‘how’ of a communication and does not provide the context of what was actually said or written. In order to obtain this information, HMRC has to use more invasive surveillance technology, such as wiretaps to listen into phone calls made by an individual.

HMRC can also film an individual’s house or track their car if they believe a case of serious tax evasion has occurred!

Get in touch

HMRC is likely to be under pressure to increase its yield from compliance activities in the coming year to make up for the huge outlay of public spending during the coronavirus crisis. Clients need to therefore be extra cautious and diligent in ensuring their tax affairs are line with HMRC’s requirements.

Tax investigations can be very stressful and costly for those involved. PfP are specialists in this area and you can protect yourself against the cost of most tax investigations by subscribing to our Tax Investigation Service. To find out more contact our tax investigation team.