Chancellor Rachel Reeves is preparing to announce a ground-breaking whistleblower reward scheme that will pay whistleblowers a share of the taxes raised by uncovering large-scale fraud – a first in the UK.
According to the Financial Times, the initiative will be unveiled in the autumn budget later this month as part of the government’s wider “closing the tax gap” strategy. The system, modeled on the successful US system, would allow HMRC to pay tipsters up to 30 per cent of any money recovered from tax evasion cases based on their information.
The move represents a major shift in the UK’s approach to whistleblowing, which has traditionally been based on moral obligation rather than financial incentives.
“The new incentive program is aimed at tax fraud with higher amounts and the enforcement of tax increases,” said a Treasury source.
The Treasury estimates that tax evasion cost the UK £5.5 billion in 2022-2023, although MPs on the Public Accounts Committee have warned that figure could be “just the tip of the iceberg”.
In the 2023-24 financial year, the government lost £47 billion in unpaid taxes, underlining the scale of the problem Reeves wants to tackle.
HMRC has already stepped up enforcement activity, carrying out 648 raids last year – a rise of 42 per cent from 2021 to 2022 – and paying out almost £1 million to whistleblowers in 2023 to 2024, 92 per cent more than the previous year.
The United Kingdom’s new whistleblower system is closely modeled on the U.S. Department of Justice’s False Claims Act and the Internal Revenue Service (IRS) whistleblower program, which have collected billions in unpaid taxes and fraud penalties.
Nick Ephgrave, then director of the Serious Fraud Office, previously called for the UK to introduce a similar system.
“If you look at the US example, their system allows this – and I think 86 percent of the $2.2 billion in civil settlements and judgments recovered by the US Department of Justice were based on whistleblower information,” Ephgrave said in February 2024.
The launch comes as the government faces growing pressure to tighten tax enforcement and close loopholes exploited by high-profile individuals and companies.
According to UK Finance, fraud losses reached £629 million in the first half of 2025, with much of the increase attributed to the use of AI-powered scams.
Reeves is expected to portray the whistleblower scheme as part of a wider campaign to “make those who owe tax pay their fair share” while plugging a multi-billion pound budget gap.
The Treasury has not confirmed how the rewards will be calculated, but sources suggested that the system will be limited to serious cases of tax evasion and corporate fraud and that monitoring mechanisms are in place to prevent abuse.
If implemented, the plan would represent a significant cultural and operational change for HMRC – bringing the UK in line with the US and recognizing whistleblowers as important allies in the fight against economic crime.
