Treasury launches tax whistleblowing scheme

In the UK, the ‘tax gap’ for the 2023/24 tax year was estimated to be £46.8 billion. This is the amount of tax that HMRC believes should have been paid, but wasn’t. The shortfall arises from a range of behaviours, with failure to take reasonable care and error accounting for a larger share than avoidance. To help shrink that figure in future years, HMRC has launched a new tax whistleblowing scheme.

The new tax whistleblowing scheme was reportedly influenced by an established one in the USA. Over there, there’s a longstanding Internal Revenue Service (IRS) Whistleblower Office. Essentially, people can report suspected tax non-compliance, and eligible whistleblowers may receive a share of the proceeds collected. This is generally between 15 and 30 per cent.

What was the previous system in the UK?

Under the previous system, some whistleblowers did get paid in the UK. However, rewards were discretionary, not guaranteed, and you needed to provide contact details to be considered for one. HMRC also made clear that it could not provide feedback on reports. In other words, there was no guaranteed incentive for tax whistleblowing.

What is the new tax whistleblowing scheme?

Before the new scheme was launched, the government said it would target serious non-compliance involving large corporates, wealthy individuals, offshore and avoidance schemes. It took inspiration from US and Canadian models. The strengthened reward scheme took effect on 26th November 2025.

How much will whistleblowers get?

Despite the fanfare, the new scheme still doesn’t guarantee rewards for whistleblowers. According to guidance on the new Strengthened Reward scheme:

You could get a reward if the information you provide to HMRC leads to the collection of at least £1.5 million in tax. You could get between 15% and 30% of the tax collected (excluding penalties and interest).

HMRC gives rewards at its own discretion and does not guarantee them. Any reward is taxable. You can report anonymously, but anonymous reports will not qualify for payment. HMRC also says some people will not qualify for a reward. These include the taxpayer involved, certain government workers, and people acting on behalf of someone else.

In short, to get a reward, you’ll probably need to tip off HMRC about serious tax evasion by large companies, very wealthy individuals or offshore / avoidance schemes.

How effective will a tax whistleblowing scheme be?

It’s hard to say how effective the new scheme will be. Certainly, because there’s no guarantee of a reward – and only rewards for blowing the whistle on very large amounts of fraud – there don’t seem to be huge new incentives to report tax dodging. That said, it would be too broad to say there are no protections from reprisals at all. In some circumstances, workers in Great Britain may have protection under wider whistleblowing law if they make a qualifying protected disclosure.

It will be interesting to see how much extra tax the new reward scheme manages to collect. An obvious benchmark will be America’s IRS Whistleblower Office. According to the IRS’s FY 2024 annual report, it paid whistleblower awards totalling $123.5 million, linked to $474.7 million in proceeds collected. That helps explain why the US model is often cited as a benchmark, even if the UK scheme is narrower and entirely discretionary.

We’ll keep an eye out to see whether the new scheme lives up to its ambitions. In the meantime, if you’re looking for legal and legitimate ways of reducing your tax bill, ask us about our tax planning services.