Measure
The government has announced an increase in the amount of tax to be collected from closing the tax gap - the gap between tax owed and tax paid. The target is to collect a further £2.4 billion in 2029/30 from closing the tax gap due to measures announced in this Budget. The government have said this will bring the total additional revenue raised by closing the tax gap this Parliament to £10 billion in 2029/30.
The key measure in this area is a new informants’ scheme, which rewards informants with a percentage of tax collected as a result of information they provide to HMRC. HMRC will pay rewards of between 15-30% of tax collected due to information provided by informants where at least £1.5m of additional tax is collected. Rewards are made on a discretionary basis and are not guaranteed. The scheme will target serious non-compliance by large corporations, wealthy individuals, and offshore and avoidance schemes.
Other measures announced by the government aim to close the tax gap through stricter enforcement, improved debt management, and investment in modernising and digitalising the tax system. The latter point is to include more use of information from third parties, and use of ‘data-driven prompts’.
All taxpayers will be impacted by at least some of the changes HMRC are making to their operations.
These measures are a continuation of, and seek to build on, the announcements made in the Autumn Budget 2024 and Spring Statement 2025.
The new informants’ scheme will apply with immediate effect.
The government’s continued focus on closing the tax gap reflects its determination to collect more of the tax which is due but has not been paid. A wide range of measures has been announced across numerous areas, reflecting the fact that every taxpayer has either paid all taxes due, or is contributing to the tax gap.
Further details of a paid whistleblower scheme are likely to be particularly interesting.