As the tax office wades through the first submissions under its new whistleblower rewards scheme, Richard Allen recalls that it is a far cry from the thanks he had when he saved the taxman billion of pounds.
HM Revenue & Customs’s new Strengthened Reward Scheme, launched just after the autumn budget last year, offers those who come forward with information about serious tax avoidance or evasion the opportunity to earn up to 30 per cent of the recovered money as a reward — as long as at least 1.5 million is recovered.
The tax gap — the difference between tax owed and tax collected — was 46.8 billion in 2023-2024, according to HMRC. It hopes that the new scheme will mirror successful incentives offered by the Internal Revenue Service (IRS) in the United States.
HMRC has previously offered rewards for information but whistleblowers have not always received them, as Allen, a businessman, knows all too well.
Allen, 62, uncovered a VAT evasion scheme being used by Play.com where the CD and DVD retailer sent merchandise via the Channel Islands in the early 2000s. He duly reported the scheme to HMRC in 2006 but didn’t get a response.
Allen’s CD and DVD business struggled because he was being undercut by 20 per cent by those willing to use the VAT avoidance scheme.
Allen said: “HMRC made my life a misery when I reported the first tax scam. I had to try to keep my business going despite the onslaught of this abuse from my competitors and the taxman did nothing.”
Incensed, he...
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