New HMRC reward scheme set to increase tax whistleblowing

Hinesh Shah, fraud, financial crime and forensic accounting specialist at Pinsent Masons, was commenting on HMRC’s ‘Strengthened Reward Scheme’, which officially came into effect on 26 November 2025. The scheme is intended to incentivise whistleblowers to report significant tax non-compliance and help to reduce the UK’s estimated £59 billion tax gap, according to the most recent statistics published by HMRC.

“HMRC has introduced the strengthened reward scheme as part of its wider efforts to tackle the UK's persistent tax gap. The scheme seeks to strengthen tax compliance by financially incentivising whistleblowers who provide actionable intelligence relating to large-scale tax evasion and avoidance,” Shah said.

Data provided by HMRC to Pinsent Masons shows that last year over 1,200 tax investigations collected enough extra tax to potentially qualify for the reward scheme.

Under the new scheme, whistleblowers who help HMRC recover at least £1.5m in unpaid tax can be rewarded with between 15% and 30% of the tax collected. Tax investigations that yield such large amounts of money usually target large companies, wealthy individuals or avoidance schemes.

Shah said: “Once publicity spreads and it is clear that substantial financial rewards are being given out, then there will be a noticeable increase in the quality and quantity of whistleblower evidence being provided to HMRC. One of the most obvious sources of this information is going to be insiders working within a company that they blow the whistle on. So, if you are a large business then you need to be aware of this and make sure you have your house in order.”

“If you are a corporate you should also make sure that all your own internal whistleblowing systems work properly and that your staff trust your whistleblower system. Often insiders only report malpractice to outside agencies, like HMRC, once they feel that their attempts to highlight the problem internally have been frustrated.”

The scheme is modelled on the IRS whistleblower programme in the US, which awarded $123.5 million across 105 cases and helped generate more than $7 billion in additional tax recoveries in the year to 30 September 2024.

“The US system recovers hundreds of millions in extra tax every year and HM Treasury will be hoping for that kind of result,” said Shah.

According to HMRC’s most recent annual report, its overall compliance yield from tax investigations was £48 billion in the last financial year. However, it is under pressure to improve on that, and more successful investigations launched on whistleblower information could help.

Shah said the scheme should make HMRC investigations quicker and more effective because whistleblowers can provide detailed information on where tax underpayments may have occurred and help provide easy access to some of the paperwork needed for HMRC to build a case.

“HMRC can spend years trying to prove a company has underpaid tax, but the new scheme could cut that to months. Whistleblowers could point HMRC straight to the evidence it needs to make a successful case,” he said.