Blowing the whistle on tax evasion

In the Autumn Budget 2025, the Chancellor announced a new whistleblower reward scheme as part of a package to bolster HMRC’s tax enforcement and recovery powers.

The new, more muscular scheme introduces higher financial rewards to individuals where their disclosures lead to the recovery of significant unpaid tax, marking a departure from HMRC’s long-standing discretionary approach. HMRC estimates (in its annual tax gap report) that the Government loses £47bn a year from unpaid taxes, and this scheme will seek to eat into this number going forward.

How the new scheme operates

We await final details of the scheme but, based on HMRC's original announcement in March 2025, informants will need to provide original, credible, verifiable information that is more than just merely speculative. Any information provided must lead to the recovery of additional tax (or penalties) that would not have otherwise been collected.

This scheme is targeted at serious, high value cases of deliberate wrongdoing. ‘Whistleblowers’ may include individuals with knowledge of unpaid taxes as a result of their role, and will also expand to other general observers. Non-disclosure agreements and confidentiality obligations do not supersede, and cannot prevent, legitimate whistleblowing disclosure.

Rewards and comparative models

When plans for a scheme were announced by HMRC in March 2025, it explicitly said it would take inspiration from the successful US and Canadian whistleblower models. The IRS have awarded $1.3bn to whistleblowers and collected in excess of $7bn since 2007 as a result of additional information provided, per its 2024 report. The model in the US offers 15% to 30% of taxes recouped to whistleblowers, where a minimum recovery of $2m is made. This is a stark difference to the relatively minor sums of less than £1m paid out to whistleblowers by HMRC under existing rules in 2023-24.

The new UK scheme will see up to 30% of sums recovered, awarded to those who ‘tip-off’ HMRC, subject to thresholds such as a minimum recovery amount of £1.5m (that would have otherwise not been recovered), seriousness criteria and reward caps.

Risks and opportunities for businesses

The introduction of this scheme will change the landscape in which businesses operate. With it, a new risk should be at the front of senior management team’s minds. We may see an influx of speculative reports, an increase in tax enquiries and investigations as well as data privacy and compliance implications. HMRC will need to determine how it will triage and act upon an increase in reporting.

As ever, preparation is key, and those businesses seeking legal advice early, with a view to implementing improved detection measures for non-compliance, and those reviewing historic and existing tax positions will be best positioned to meet fresh challenges.