Business owners are warning HMRC’s New ‘Bounty’ tax chail scheme is dangerous
HMRC’s newly-reinforced Claimant Reward Scheme – unveiled in last month’s budget and launched as soon as a month later – is facing a backlash from business owners who warn it could create a wave of predatory claims and cost them far more revenue.
The scheme gives HMRC the ability to pay presents 15-30% of the additional tax received above a minimum threshold of $1.5 million, without penalties and interest. The authorities say the move aims to reveal credible customs related to the structures of innocent organizations, aggressive avoidance schemes, large companies and highly qualified individuals.
But business leaders fear the size of the potential aunty will frustrate former employees, competitors and advisers, competitors and even former partners to file difficult or favorable reports, resulting from a long, expensive investigation that fails to reveal any meaningful tax reform.
HMRC’s pressure on rewards is speculative, not guaranteed, and can take years to materialize due to the complexity of major tax situations. But critics say it’s this long list – and the obligation to test all claims – that will create operational difficulties and unnecessary costs.
Tony Redondo, founder of the cosmos-based Cosmos Currency Exchange, said the premise of the program is understandable – but the unintended consequences can be dire.
“In theory, an enhanced reward system is a no-brainer. But I’m afraid to investigate external experiences, hmrc will confuse tip-offs with their purpose, and taxpayers will foot the bill.”
Sam Alsop-Hall, Chief Strategy Officer and employer at Birmingham-based Clive Henry Group, said the policy risks importing the worst of a bad culture – without adequate safeguards.
“HMRC’s system puts taxpayers at the mercy of book hunters, and that can’t happen without strong protection. People can do things in long ways and drag others through long procedures with little or no evidence.
The emotional and state damage is huge – and when financial incentives are involved, the risks are magnified and sustained. “
ALSOP-HALL has called on HMRC to set out how unfounded allegations will be sorted out and what recovery or support will be available to people and businesses unfairly targeted under the scheme.
Although the scheme aims to target large and uncomplicated cases, business leaders have warned that presumptive claims may not respect those limits – with all allegations, requiring the involvement of HMRS.
The fear among SMEs is that the system could create an environment where unverified claims could lead to uncontested checks, reputational financial damage and expensive cash flow, even if there is no cash available.
HMRC has been approached to clarify further safeguards and oversight mechanisms.
