"HMRC's newly strengthened tax informant reward scheme - unveiled in last month's Budget and launched with immediate effect - is facing an early backlash from business owners who warn it could trigger a wave of malicious claims and cost the Revenue far more than it recovers. The scheme gives HMRC the power to pay informants 15-30% of additional tax recovered above a minimum threshold of £1.5 million, excluding penalties and interest."
"HMRC stresses rewards are discretionary, not guaranteed, and could take years to materialise due to the complexity of major tax cases. Yet critics argue it is precisely this lengthy lag - and the obligation to assess every claim - that will create significant operational strain and unnecessary cost."
""In theory, the Strengthened Reward Scheme is a no-brainer. But in practice, I fear a lot of time and cost will be wasted on spurious investigations as disgruntled ex-employees, embittered ex-spouses and sacked advisers dob in their targets via exaggerated, malicious or outright vindictive tip-offs. HMRC will have to sift through all of it, and taxpayers will foot the bill.""
HMRC has strengthened a tax informant reward scheme offering 15–30% of additional tax recovered above a £1.5 million threshold, excluding penalties and interest. Officials intend the measure to uncover intelligence on offshore structures, aggressive avoidance schemes, large corporates and ultra-high-net-worth individuals. Business leaders warn the size of potential rewards could encourage disgruntled ex-employees, sacked advisers, competitors and ex-spouses to submit spurious or vindictive reports. HMRC notes rewards are discretionary and may take years due to case complexity. Critics counter that the duty to assess every claim will impose operational strain and unnecessary costs.
Read at Business Matters
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