HMRC has the power to recruit sources under the Investigative Powers Act and will pay out if information provided helps it to recover monies lost to avoidance and evasion, or catch lawbreakers. 

Although all are considered, not all tip-offs made via the fraud hotline result in payouts. The amount of money on offer ranges at the tax authority’s discretion, based on the outcomes of the intelligence provided. 

HMRC is highly secretive about the information it receives and its sources, but claims to have protected hundreds of millions of public money through its “covert human intelligence sources”. 

It said it could not comment on whether it was paying out for tip offs about furlough abusers, saying it did not want to “give insights to criminals”, but said it was using a number of means. 

Richard Morley of accountants HW Fisher said information often came from former disgruntled employees who reported to their old bosses’ dodgy dealings. 

“In other cases it is a former spouse grassing up an ex during a divorce proceeding, or is sometimes just a nosy neighbour who becomes suspicious of a new car appearing on the driveway each year even though the person seems to do no work,” he said. 

A spokesman for the tax office said it urged “anyone with information about tax fraud to report it to us”.