The fight against tax fraud and serious tax avoidance has become a major priority for HMRC. As pressure grows to close the UK’s tax gap and improve tax compliance, the government has introduced a new approach designed to encourage individuals with credible information to come forward.
The result is a strengthened framework for HMRC whistleblower rewards, announced as part of the Autumn Budget of 2025. The scheme is intended to generate valuable intelligence that can help HMRC identify unpaid tax, challenge complex tax avoidance schemes, and take enforcement actions against those involved in tax avoidance or evasion.
The timing is significant. The UK tax gap is currently £46.8 billion. This figure represents the difference between the amount of tax that should be collected and the amount actually received by HM Revenue & Customs. Reducing this gap remains a central objective of UK tax enforcement policy.
Under the HMRC whistleblower rewards scheme, HMRC aims to collect £225 million in additional tax by 2031 through information supplied by whistleblowers. The initiative reflects a growing belief that people with insider knowledge can play an important role in identifying financial crime, economic crime, offshore structures, and other forms of non compliance that might otherwise remain hidden.
The concept is not entirely new. HMRC has historically made payments to informants where disclosures resulted in tax being collected. However, those payments were relatively modest. In 2024-25, HMRC paid out approximately £850,000 in informant rewards. The strengthened reward scheme introduces a more structured framework, bringing the UK closer to international whistleblower programs.
The new HMRC whistleblower rewards scheme has been modelled on the Internal Revenue Service Whistleblower Program in the United States. The IRS paid whistleblowers $123.5 million in 2023-24, demonstrating how financial incentives can encourage disclosures that lead to substantial tax recovery.
At The Taxcom, we regularly assist clients dealing with HMRC enquiries, tax investigations, CoP8 investigations concerning serious tax avoidance, and CoP9 investigations involving suspected tax fraud. Understanding how the HMRC whistleblower rewards scheme operates is therefore increasingly important for businesses seeking to maintain robust compliance standards and minimise regulatory risk.
What Is the HMRC Whistleblower Reward Scheme?
The HMRC whistleblower reward scheme is a government initiative designed to encourage individuals to provide information about tax fraud, tax evasion, serious tax avoidance, and other forms of financial misconduct that result in unpaid tax.
Under the HMRC whistleblower rewards scheme, eligible individuals may receive a financial reward where their disclosure directly contributes to HMRC recovering tax revenue that would otherwise have remained unpaid. The framework forms part of a broader strategy to strengthen tax compliance and improve tax collection across the UK economy.
The scheme was launched in the Autumn Budget of 2025 and introduces a more formal approach to rewarding informants. Unlike previous arrangements, the new scheme establishes clearer expectations regarding eligibility, payment thresholds, and reward calculations.
A key feature is that HMRC whistleblower rewards are linked to successful tax recovery. This means payments are only considered where HMRC ultimately collects additional tax because of the information provided. The focus is therefore on high-quality disclosures rather than speculative allegations.
To qualify, the information supplied for HMRC whistleblowing reward must be:
- Original and not already known to HMRC
- Credible and capable of verification
- Relevant to significant tax non compliance
- Supported by structured intelligence rather than general suspicions
HMRC requires specific details that can assist investigators in understanding how the alleged conduct occurred, who was involved, and how much tax may have been lost. Simply suspecting wrongdoing is unlikely to satisfy the threshold for consideration.
The government hopes that HMRC whistleblower rewards will encourage individuals with direct knowledge of tax avoidance schemes, offshore arrangements, hidden income, false accounting records, and other forms of tax fraud to come forward. In doing so, HMRC seeks to obtain intelligence that may not emerge through routine processes or traditional compliance checks.
The scheme also reflects a broader trend among regulators. Agencies such as the Serious Fraud Office, the Competition and Markets Authority, and international tax authorities increasingly recognise the value of insider information in uncovering complex economic crime.
Importantly, the HMRC whistleblower rewards are not automatic. HMRC retains significant discretion over whether to make a payment and how much should be awarded. Even where information leads to a successful investigation, rewards are discretionary and not guaranteed by HMRC.
The government believes that carefully structured financial incentives can encourage reporting while preserving the integrity of the tax system. However, balancing confidentiality, accountability, and effective enforcement remains a challenge as the new scheme develops.
Who Can Report Tax Fraud or Tax Evasion to HMRC?
One of the most common questions surrounding HMRC whistleblower rewards is who can actually make a report and whether they may qualify for a payment.
The scheme is intended to attract information from individuals who possess direct knowledge of tax wrongdoing. HMRC is particularly interested in disclosures that reveal unpaid tax, serious tax avoidance, tax fraud, or arrangements designed to conceal revenue from the tax authorities.
Importantly, not everyone who submits information will qualify for a reward. Eligibility depends on both the source and quality of the information provided.
Employees and Former Employees
Employees are among the most likely sources of valuable intelligence for HMRC whistleblower rewards.
Individuals working within a business often have access to financial records, internal communications, accounting systems, and decision-making processes that may reveal tax avoidance or evasion. Former employees may also possess relevant information regarding historical conduct that remains unknown to HMRC. For example, an employee may become aware of:
- Deliberate underreporting of income
- False invoicing arrangements
- Hidden cash transactions
- Offshore structures established to reduce tax liabilities
- Artificial tax avoidance schemes lacking commercial substance
Where such information is original, credible, and verifiable, it may form the basis of a report for HMRC whistleblower rewards.
Contractors, Suppliers, and Business Partners
Potential whistleblowers are not limited to employees.
Contractors, consultants, suppliers, and business partners may encounter evidence of tax fraud during the course of commercial relationships. In some situations, external parties may identify irregularities that internal staff overlook, remain silent about or fail to report.
Businesses operating within complex corporate structures often involve multiple advisers and service providers. These individuals may possess sensitive information relevant to serious tax avoidance arrangements or broader financial crime concerns and can take part in HMRC whistleblower rewards.
Professional Advisers and Industry Insiders
Accountants, tax specialists, auditors, compliance professionals, and other industry participants may occasionally become aware of conduct that raises legitimate concerns.
However, professional obligations must always be considered carefully. Certain disclosures may already be subject to legal or regulatory reporting requirements. In such circumstances, separate eligibility rules may apply. HMRC has indicated that rewards are intended to encourage the disclosure of information that would not otherwise become available through existing reporting channels.
Members of the Public
In some cases, members of the public may also possess valuable information. For example, an individual may become aware that a taxpayer involved in a business activity is concealing income, operating outside official records, or engaging in illegal activity that affects tax liabilities.
However, HMRC requires specific structured intelligence for claims, not general suspicions. Simply believing that someone may be avoiding tax is unlikely to be sufficient. To be eligible, a whistleblower must provide original, credible, and verifiable information. The disclosed information must not already be known to HMRC.
Who Cannot Receive HMRC Whistleblower Rewards?
Not everyone who submits a report can benefit from HMRC whistleblower rewards program.
- Current or former government employees cannot receive rewards for information uncovered during their employment. This restriction helps preserve public trust and avoids conflicts of interest within government departments.
- If the whistleblower is the taxpayer or planned the evasion, they are ineligible for a reward. Similarly, individuals who played a significant role in designing or facilitating the conduct may find themselves excluded from the scheme.
- Anonymous reports are not eligible for rewards. While HMRC may still review anonymous information, informants must provide contact details to receive rewards. Those wishing to be considered under the reward scheme must therefore be willing to identify themselves to HMRC.
How to Report Tax Fraud or Serious Tax Avoidance to HMRC
For individuals considering a disclosure, understanding the reporting process is just as important as understanding eligibility. While HMRC whistleblower rewards may provide a financial incentive, the primary objective of the scheme is to help HMRC identify and recover unpaid tax arising from tax fraud, tax avoidance or evasion, and other forms of non compliance, which in some cases may also be addressed through HMRC voluntary disclosure.
The quality of a report can significantly influence whether HMRC can act on the information provided. A well-prepared disclosure supported by credible information is far more likely to assist investigators than a report based on assumptions or incomplete details.
Step 1: Gather Relevant Information
Before submitting a report, potential whistleblowers should focus on the information they already possess rather than attempting to conduct their own investigation.
HMRC expects disclosures to be based on first-hand knowledge or information obtained through legitimate access. Individuals should not seek additional evidence through unauthorised means or place themselves at legal or professional risk.
What Information Is Useful to HMRC?
Where possible, a report of HMRC whistleblower rewards should include:
- Names of individuals or companies involved
- Relevant dates and time periods
- Details of suspected tax avoidance schemes
- Information relating to hidden income or revenue
- Description of offshore structures or arrangements
- Evidence of false accounting or undeclared transactions
- Estimated amounts of unpaid tax where known
- Supporting documentation already in the whistleblower’s possession
HMRC requires specific structured intelligence for claims, not general suspicions. Providing clear facts allows investigators to assess the credibility of the disclosure more effectively.
Do Not Investigate Further
One of the most important rules for potential whistleblowers is to avoid conducting their own investigation. Whistleblowers must not attempt to gather more evidence or alert the target during filing.
Attempting to obtain additional documents, access restricted records, or question colleagues may compromise future investigations and create legal complications. The role of the whistleblower is to report information already known to them. It is HMRC’s responsibility to investigate the matter further.
Step 2: Submit the Information to HMRC
HMRC provides dedicated channels for individuals wishing to report tax fraud or report serious tax avoidance. The most common route to contact HMRC is through HMRC’s online form, which allows individuals to submit information securely. Depending on the circumstances, alternative reporting methods may also be available.
When completing a disclosure for HMRC whistleblower rewards, the report should be as detailed as possible. Useful information may include:
- Identity of the person or business concerned
- Nature of the suspected misconduct
- How the tax loss occurred
- Relevant financial transactions
- Locations, jurisdictions, or offshore arrangements involved
- Details of supporting evidence
Providing comprehensive information from the outset can help HMRC assess whether further action is warranted.
Step 3: Provide Contact Details
A critical requirement under the new whistleblower reward scheme is the need to provide contact details. Informants must provide contact details to receive rewards.
This allows HMRC to:
- Verify information
- Request clarification where necessary
- Maintain communication during assessment
- Consider eligibility for future payments
Anonymous reports are not eligible for rewards. While anonymous disclosures may still be reviewed, individuals who wish to be considered under HMRC whistleblower rewards must identify themselves to HMRC.
Step 4: Allow HMRC to Conduct Its Investigation
Once a disclosure has been submitted, responsibility passes to HMRC. The agency will determine whether the information appears credible, whether the allegations justify further investigation, and whether additional tax may be recoverable.
Potential whistleblowers should understand that investigations involving tax fraud, offshore structures, avoidance schemes, and large companies can be highly complex.
Many cases involve:
- Multiple jurisdictions
- Extensive document reviews
- Financial analysis
- Interviews with relevant parties
- Legal proceedings
As a result, investigations from disclosures may take several years to conclude.
How HMRC Whistleblower Rewards Are Calculated
One of the most significant features of the new HMRC whistleblower rewards framework is the introduction of a clearer methodology for calculating potential payments. While rewards remain subject to HMRC’s discretion, the strengthened reward scheme provides greater transparency around how awards may be determined when a disclosure results in successful tax recovery.
The government’s objective is to encourage high-quality disclosures that help uncover serious tax avoidance, tax evasion, and tax fraud while ensuring that rewards are proportionate to the value of the information provided.
Minimum Tax Recovery Threshold
Under the new scheme, a minimum of £1.5 million in tax must be collected before a reward can be considered. This threshold reflects HMRC’s intention to focus resources on cases involving substantial amounts of unpaid tax and significant non compliance.
As a result, the scheme is primarily aimed at disclosures involving large companies, complex tax avoidance schemes, offshore structures, wealthy individuals, and other arrangements that may result in sizeable losses to the Exchequer.
The £1.5 million threshold applies to tax actually recovered by HMRC. If the investigation does not result in sufficient tax being collected, no reward will be payable under the scheme.
Reward Percentage: 15% to 30% of Collected Tax
Where the eligibility criteria are satisfied, HMRC whistleblower rewards range from 15% to 30% of collected tax. The new scheme offers rewards of 15-30% of collected tax, providing a potentially substantial financial reward for individuals who provide original and credible information that leads directly to successful tax enforcement actions.
The final percentage awarded will depend on several factors, including:
- The quality and reliability of the information provided
- The significance of the disclosure
- The extent to which the information contributed to HMRC’s investigation
- The level of cooperation provided by the whistleblower
- Whether the information was previously unknown to HMRC
This approach closely mirrors the Internal Revenue Service Whistleblower Program in the United States, which has generated substantial tax recoveries through whistleblower-led disclosures.
Excluding Penalties and Interest
A common misconception is that rewards are calculated on the total amount recovered by HMRC. In reality, the reward is calculated on unpaid tax collected, excluding penalties and interest.
This means that if HMRC recovers tax, penalties, and late payment interest from a taxpayer, only the tax element will be used when calculating a potential reward. The reward is calculated on unpaid tax collected, excluding penalties and interest.
This distinction is important because penalties in tax fraud investigations can be significant. However, the government has chosen to link rewards directly to tax revenue recovered rather than punitive amounts imposed on the taxpayer.
HMRC Whistleblower Rewards Remain at Discretion
Although the strengthened reward scheme introduces clearer parameters, there is no automatic entitlement to payment. Rewards are discretionary and not guaranteed by HMRC.
Even where a disclosure results in additional tax being collected, HMRC retains the authority to determine whether a reward should be paid and, if so, the appropriate amount. Factors that may influence HMRC’s discretion include:
- The whistleblower’s conduct
- The accuracy of the information supplied
- Whether the disclosure materially advanced the investigation
- Compliance with reporting requirements
- Eligibility under the scheme rules
This means that potential whistleblowers should view the possibility of payment as an incentive rather than a guarantee.
When Will HMRC Whistleblower Rewards Be Paid?
Tax investigations are rarely resolved quickly, particularly when they involve serious tax avoidance, offshore structures, large corporations, or complex financial arrangements. Tax investigations can take several years to conclude before payouts are made. Investigations from disclosures may take several years to conclude.
As a result, payments under HMRC whistleblower rewards are expected to occur only after HMRC has successfully completed its investigation and recovered the relevant tax. The scheme was launched in the Autumn Budget of 2025, and the first rewards are expected to be paid in 2027/28.
Potential whistleblowers should therefore be prepared for a lengthy process. The focus of the scheme is on successful tax collection rather than immediate compensation.
A Significant Shift in UK Tax Enforcement
The introduction of structured payment thresholds and percentage-based awards marks a major development in UK tax enforcement policy. By linking rewards directly to tax collected, the government hopes to encourage disclosures that uncover substantial tax losses while discouraging speculative or low-quality reports.
For individuals with access to original, credible, and verifiable information, HMRC whistleblower rewards may offer a meaningful financial incentive to report serious tax avoidance, tax fraud, and tax evasion. At the same time, this UK scheme reinforces HMRC’s broader objective of improving tax compliance and narrowing the UK’s tax gap through targeted enforcement activity.
Unsure Whether a Tax Arrangement Could Attract HMRC Scrutiny?
With the introduction of HMRC whistleblower rewards, businesses and individuals face increased scrutiny of tax arrangements that may be perceived as aggressive, artificial, or non-compliant. A disclosure from an employee, contractor, adviser, or third party could potentially trigger an HMRC investigation for tax avoidance and evasion.
At The Taxcom, we help businesses assess tax risks, review complex tax arrangements, and respond to HMRC enquiries before issues escalate through our expert tax advisory and compliance services. If you are concerned about the compliance of a tax structure or want independent advice on managing HMRC risk, our specialists can help you understand your position and take proactive steps to protect your interests.
Contact us to get the best advice related to HMRC whistleblower rewards or any other tax related query.