Business leaders across the UK have raised serious concerns that a new HM Revenue and Customs (HMRC) initiative designed to catch major tax evaders could backfire spectacularly.
What is the Strengthened Reward Scheme?
Announced by Chancellor Rachel Reeves in the Autumn Budget of December 2025, the 'Strengthened Reward Scheme' grants HMRC the power to pay informants a significant bounty. Individuals who provide credible intelligence leading to the recovery of substantial unpaid tax can receive between 15% and 30% of the additional tax collected. This reward only applies where the recovered sum exceeds a minimum threshold of £1.5 million, excluding any penalties and interest.
The policy's stated aim is to flood HMRC with high-quality information targeting offshore tax avoidance, complex schemes used by large corporations, and wealthy individuals. The department has cautioned that rewards are given at its discretion and are not guaranteed, with complex cases potentially taking years to resolve before any payment is made.
Risks of False Accusations and 'Bounty Hunters'
Despite the goal of recovering lost revenue, business owners fear the financial incentive will lead to a surge in speculative and malicious reports. They argue that individuals and companies could face lengthy, damaging investigations based on flimsy evidence from disgruntled former employees, spouses, or advisers.
Tony Redondo, Founder of Cosmos Currency Exchange in Newquay, expressed his apprehension: "In practice, I fear a lot of time and cost is going to be wasted on spurious investigations. People nursing a grudge could submit exaggerated or vindictive tip-offs, which HMRC will then have to sift through."
Echoing this concern, Sam Alsop-Hall, Chief Strategy Officer at Birmingham's Clive Henry Group, stated: "HMRC’s plan risks turning taxpayers into bounty hunters, and that cannot happen without strong safeguards. What protections exist for those hit with false reports?"
Calls for Clarity and Safeguards
Experts are drawing parallels with existing whistleblowing systems, where individuals can inflict severe emotional and reputational damage by making baseless claims. They warn that adding a direct financial incentive dramatically increases this risk.
While HMRC states it reviews all information carefully, business leaders are demanding greater transparency. They want clear details on how the department will filter out unsubstantiated claims and what support will be available for individuals or businesses wrongly accused under the new scheme.
The core fear is that the operational cost of investigating a wave of malicious tips, combined with the potential for unjust reputational harm, could ultimately outweigh the tax revenue the scheme manages to collect.
