Chancellor Reeves Introduces US-Style Whistleblower Payments to HMRC
Chancellor Rachel Reeves is preparing to launch a groundbreaking US-style whistleblower programme for HM Revenue and Customs (HMRC), marking a significant departure from Britain's traditional approach to reporting wrongdoing. The scheme, expected to be announced later this month, could see informants receiving up to 30 per cent of any taxes collected as a result of their tip-offs about large-scale tax fraud.
Combating Britain's Multi-Billion Pound Tax Gap
The new incentive programme comes as the government confronts staggering losses from unpaid taxes. Recent estimates place tax evasion in the UK at approximately £5.5 billion for the 2022-23 period, though the Public Accounts Committee warns this figure might represent "just the tip of the iceberg". More dramatically, the Treasury suffered a £47 billion shortfall in unpaid taxes during the 2023-24 tax year.
With a substantial fiscal hole to fill, Chancellor Reeves is expected to use her upcoming Autumn Budget speech to outline this powerful new tool for HMRC. The scheme specifically targets higher-value tax fraud cases and aims to significantly enhance the government's enforcement capabilities against serious tax evasion.
HMRC's Increasing Enforcement Activity
This initiative follows a notable increase in HMRC's anti-fraud activities. Recent data reveals the tax agency paid out nearly £1 million for tax fraud tip-offs during 2023/24 – a dramatic 92 per cent increase from the £508,500 distributed in the previous year.
HMRC has also substantially escalated its physical enforcement operations. The number of raids conducted has shown consistent growth: 458 raids from April 2021 to March 2022, increasing to 623 raids the following year, and reaching 648 raids between April 2023 and March 2024.
The intensified focus forms part of Labour's broader 'Close the Tax Gap' initiative, designed to recover billions in lost revenue. The whistleblower scheme represents the most radical innovation in this campaign, drawing inspiration from highly successful American models where financial incentives have proven remarkably effective.
Following the US Success Story
HMRC isn't the first UK agency to consider adopting the American approach to whistleblowing. Nick Ephgrave, during his tenure as director of the Serious Fraud Office (SFO), expressed strong support for similar measures in February 2024.
"If you look at the example of the US, their system allows that, and I think 86 per cent of the $2.2bn in civil settlements and judgments recovered by the US Department of Justice were based on whistleblower information," Ephgrave stated, highlighting the potential effectiveness of such programmes.
The urgency for enhanced anti-fraud measures is underscored by recent figures from trade body UK Finance, showing fraud losses reached £629 million in just the first half of 2025, with criminals increasingly using AI to execute more sophisticated scams.
