- News
- UK
- Home News
Successful whistleblowers could receive hundreds of thousands from the tax authority
Albert TothWednesday 03 December 2025 17:29 GMTComments
CloseHMRC worker ordered to pay £20,000 after refusing to return to office after lockdown
Get the free Morning Headlines email for news from our reporters across the world
Sign up to our free Morning Headlines email
Sign up to our free Morning Headlines email
Email*SIGN UPI would like to be emailed about offers, events and updates from The Independent. Read our Privacy notice
HMRC is launching a new “reward” scheme for people who report tax avoidance or evasion, similar to a system used by the US Internal Revenue Service (IRS).
Whistleblowers who provide information that leads to the collection of unpaid tax can get 15 to 30 per cent of the funds recovered, excluding penalties and interest.
However, the scheme is only for individuals who have information about serious tax avoidance, meaning £1.5 million or more. This means successful whistleblowers could receive £450,000 for reporting to HMRC, before penalties and interest.
It is similar to the IRS reward scheme, which also pays informants 15 to 30 per cent of additional tax collected. From October 2022 to September 2023, the American tax authority paid 121 rewards to whistleblowers, a total of $88.8 million. This was much lower than the 6,455 submissions received in that time.
HMRC is launching a new ‘reward scheme’ for people who report tax avoidance or evasion (PA) (PA Wire)This level of tax avoidance usually involves large companies, wealthy individuals, and offshore or avoidance schemes, HMRC says.
The tax authority lays out several criteria that disqualifies the whistleblower from receiving an award, including:
- being a civil service while the information was received (even if no longer)
- being the taxpayer involved in the evasion or avoidance
- the information was already known to HMRC, or could have been identified through routine processes
- the reward might lead to funding illegal activity
- the information is being provided anonymously
However, it asks that anyone who is aware of tax avoidance report this, even if not eligible for a reward.
HMRC adds that it will contact anyone who gets in touch if they need more information and if they are eligible for a reward. However, it adds that investigations can take “years”, and so compensation should not be expected immediately.
The reward scheme is live now, beginning on 26 November following Labour’s second autumn Budget.
Paul Dowling, a partner in law firm Leigh Day’s International Corruption and Whistleblowing team said he was already seeing an interest from potential informants seeking advice.
Mr Dowling said: “Whistleblowers can face retaliation, blacklisting or reputational damage. They need expert guidance from the outset on how to make use of the legal mechanisms available to protect their rights and secure appropriate remedies - whether that’s an Employment Tribunal claim, a civil claim, or a complaint under the Whistleblower Reward Scheme.
“This proposed HMRC scheme represents a transformative step towards ensuring stolen tax revenue is returned to the public purse. Rewarding those who come forward reflects the critical public service whistleblowers perform in exposing serious wrongdoing.”
Three years ago, HMRC reportedly estimated that tax evasion cost £5.5bn in one year. A spokesperson said: "The government has strengthened our scheme for rewarding informants to encourage reporting of suspected high-value tax fraud and tax avoidance.
"We value the information we receive and urge anyone with information about tax fraud to report it to us online by going to GOV.UK and searching ‘report fraud HMRC’.”
More about
HMRCwhistleblowerstax avoidanceTaxcompensationJoin our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments
