New plans to tackle tax fraud
HMRC is looking at working more closely with the commercial sector to help reduce tax credits error and fraud. The results of a small-scale trial carried out from May to July 2013 with Transactis and sub-contractor Bosch has, according to HMRC, identified £20m of potential losses. A total of 16,000 cases were reviewed as part of the trial of which 5,500 cases appeared to contain instances of errors and/or fraud.
The trial suggested that there are many benefits to using private supplies to assist HMRC in this type of work. Using private suppliers is not a new idea and HMRC already works with the private sector in a number of areas including debt collection and identifying high-risk tax credit claims.
Ministers have now asked HMRC to explore the types of service the commercial sector can offer on a larger scale, and to engage with potential suppliers to gain an informed understanding of indicative costs, benefits and timelines ahead of an invitation to tender.
HMRC believe that using the private sector could result in a significant reduction in levels of tax credits error and fraud. A summary of the trial is expected to be published in due course.