Plane stupid

27 May 2009

Issue: 4207 / Categories: Forum & Feedback , Income Tax

Is the income received from the police in the capacity as a police informant subject to an income tax charge? Recent press reports indicate that the advice on this matter was that a liability would not arise. If wrong, has false information been supplied? The advice seems wrong, but not such that an offence was committed

A member of the organisation Plane Stupid is reported to have been approached by the Scottish constabulary to recruit her as an informant.

Some conversations were recorded and apparently include the police offering cash and suggesting that the money is tax free with tens of thousands of pounds paid to informants over several years.

It is clearly an offence for any informant to fraudulently evade income tax (FA 2000 s 144) and following FA 2008 Sch 40 there is a new penalty for any third party who deliberately supplies false information to a person intending that person to supply inaccurate documents to HMRC.

Assuming that the news report was accurate were the police correct in suggesting that this payment is not taxable and if incorrect advice has been given would this be outside the new FA 2008 legislation?

Query 17 407 – KMC

Reply by Michael Blackwell...

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Plane stupid

27 May 2009

A member of the organisation Plane Stupid is reported to have been approached by the Scottish constabulary to recruit her as an informant.

Some conversations were recorded and apparently include the police offering cash and suggesting that the money is tax free with tens of thousands of pounds paid to informants over several years.

Query 17 407 – KMC