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. Officials say the measure is aimed squarely at uncovering credible intelligence relating to offshore structures, aggressive avoidance schemes, large corporates and ultra-high-net-worth individuals.
But business leaders fear the size of the potential bounty will encourage disgruntled former employees, sacked advisers, competitors and even ex-spouses to file spurious or vindictive reports, triggering long, expensive investigations that fail to yield any meaningful tax recovery.
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.
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