Whistleblowers who inform HMRC about tax-dodging will get a cut of any money collected as a result, the government confirmed, as Rachel Reeves announced plans to raise an extra 1bn a year by closing the “tax gap”.
At her first budget in October, Reeves vowed to collect 6.5bn a year by cracking down on tax avoidance, which is legal, and tax evasion, which isn’t.
On Wednesday, during her spring statement, she raised the target to 7.5bn, a projection that won the blessing of the Office for Budget Responsibility (OBR), the independent body that vets the chancellor’s sums.
Measures to close the “tax gap” include:
Spending 100m on 500 HMRC compliance stafff
87m to improve HMRC’s debt collection
Prosecuting 20% more tax fraudsters
“Compensation” for whistleblowers
Reeves is also launching four consultations on how to further improve tax collection, including one aimed at “promoters” of avoidance schemes.
Together, new proposals to close the tax gap will raise an extra 1.055bn by 2029-30, according to Treasury calculations, which was rubber-stamped by the OBR.
The lion’s share of the sum, 715m, is slated to come from improved collection of overdue debts, including the hiring of 600 new compliance offers.
A further 125m comes from increased penalties for late payment, 95m from hiring 500 extra staff to collect due debts – on top of 5,000 announced at the budget – and 125m from extending the digitisation of income tax collection to those earning more than 20,000, from...
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