James Murray, Exchequer Secretary to the Treasury, recently unveiled his plans to enable HM Revenue & Customs (HMRC) to deliver Plan for Change through securing tax revenue and creating the conditions for growth.
In a press release issued on 11March, Murray announced the creation of a new reward scheme for tax-evasion informants – a scheme that aims to “target serious non-compliance in large corporates, wealthy individuals, offshore and avoidance schemes.”
Here’s what you need to know about the scheme and how to make sure your carefully laid plans for tax efficiency are compliant with the law.
What we know about the scheme so far
The proposed UK scheme takes inspiration from the successful US and Canadian ‘whistleblower’ models.
Current plans indicate that informants will receive a percentage of the tax recovered as compensation. In the cases where this tax liability is large, this could mean a reward worth millions of pounds to whistleblower.
However, the figure for what percentage informants will receive is yet to be decided – although Philip Fisher reports in AccountingWEB that the figure could be up to 25 per cent.
The Treasury has stated that further details about the scheme will be announced in due course.
This new whistleblower reward scheme falls under the Government’s broader mission to tackle tax evasion.
HMRC intends to recruit an additional 5,000 new compliance caseworkers and 1,800 debt collection officers, with 600 new compliance staff due to start work this month.
Additionally, the Government is investing in Artificial Intelligence (AI) to assist with compliance work.
With these new measures, the Government hopes to raise £6.5 billion per year by 2029/30.
What you need to consider with your tax planning
If you have left – or are thinking about leaving – the UK for a more tax-friendly region, you mustn’t fall into the trap of believing that you are no longer liable for UK taxes.
It will also become more difficult to house your wealth outside the UK to avoid taxation.
There are range of factors to consider when planning your tax minimisation strategy:
- Tax residency matters: To escape UK taxes by leaving the country, you’ll need to officially change your tax residency. That means spending fewer than 183 days a year in the UK. Don’t try to play both sides – HMRC is sharp when it comes to catching “phantom” residents.
- Capital Gains Tax (CGT): If you sell UK property after becoming non-resident, you’re still liable for CGT. So, if you’re planning to sell your estate, make sure you know the rules before you hit the “market” button.
- Inheritance Tax (IHT): One of the toughest taxes to mitigate, IHT follows UK-domiciled individuals wherever they go. Furthermore, from 6 April 2025, the UK Government will introduce a strict residence-based system, which will effectively end the use of offshore trusts to shield assets from IHT.
- Non-dom status: As of April 2025, non-dom tax status will be abolished and replaced with a new residence-based regime. Individuals who opt into this new regime will get a short-term break from paying UK tax on foreign income and gains, but only for the first four years of tax residence.
The rules around tax can be complicated, especially for those with income from, and assets held in, different countries.
Seek expert tax advice is essential for making sure you can optimise your tax position without falling foul of the law.
Our tax specialists can help you understand your obligations and prepare legal, tax-efficient strategies to secure your financial future.
