HMRC has introduced a new strengthened reward scheme for tax evasion cases and full details were made available in the recent budget.
HMRC operated an existing scheme to make payments to informants on a discretionary basis, however the criteria for eligibility were unclear, the payments were small and there was no linkage between the amounts recovered by HMRC and the payment made. In 2023/24, HMRC made payments of approximately £1m.
The new scheme, details of which were announced in the Budget in November, is modelled on the US IRS approach, permits informants who provide information leading to the recovery of at least £1.5m in tax in serious tax avoidance or evasion cases to receive between 15% to 30% of the tax collected. HMRC has reiterated that awards are discretionary and not guaranteed.
Who could get a reward
The HMRC guidance make clear that the strengthened reward scheme is for individuals and will typically involve tax avoidance and evasion within large corporates, wealthy individuals or offshore and avoidance schemes, i.e. complex tax cases.
It will not apply in the following circumstances:
- Civil servants or Government contractors who obtained the information through their work;
- Taxpayers involved in, or who planned or initiated, the tax evasion or avoidance;
- Where the information is already known to HMRC or could have been discovered through routine checks;
- The reward could directly/indirectly fund illegal activity;
- where disclosure is legally required or prohibited;
- where the whistleblower is acting for someone else;
- where the information originates from someone who would not be eligible for a reward;
- where the information is supplied anonymously [anonymous reports will be accepted, but no reward will be made]
What the report will expect to be included
- what type of activity is being reported;
- how the whistleblower knows about it;
- what is the relationship between the whistleblower and the business or individual;
- how long has it been going on for;
- the total value or estimate of the activity;
- a description of any supporting information held etc.
How can WLH Tax help
WLH Tax are in regular contact with the team at HMRC that are administrating the Whistleblower Reward Scheme. We can present your submission to HMRC to give you the best chance of being accepted into the scheme and receiving a reward. Please contact us today if you require assistance making a submission under the HMRC Whistleblower reward scheme.