UK consults on whistleblower rewards as SFO urges early self-reporting

The government has launched a consultation on enhancing whistleblower protections, including plans to introduce a financial incentive scheme for individuals who report economic crimes to the SFO.

The proposed reforms aim to strengthen the SFO’s capacity to investigate and prosecute serious fraud, bribery and corruption and follow recommendations put forward in a review by Jonathan Fisher KC, which called for wide-ranging reforms to make the UK’s response to fraud more agile and proactive to help prevent and deter criminal activity.

The consultation follows the introduction of stronger whistleblowing protections across Europe, and, more recently, the launch of a corporate whistleblower rewards pilot programme in the US. These developments have reignited calls to reform the UK’s existing whistleblowing framework set out in the Employment Rights Act 1996, which applies in England, Wales and Scotland.

In particular, the consultation outlines introducing a highly anticipated whistleblower incentives programme that would financially reward individuals for coming forward to report financial crimes. Similar schemes are already operating in the US and Canada.

The government has proposed that any reward should be calculated as a percentage of the financial penalty or fine imposed on a company, which is similar both to the current approach adopted in the US and HMRC’s recently introduced ‘Strengthened Reward Scheme’.

Under the HMRC scheme, which took effect in November 2025, whistleblowers who help HMRC recover at least £1.5m in unpaid tax can be awarded between 15% and 30% of the tax collected. Although payments are discretionary, there is no cap on the size of the potential award.

Plans for a broader incentivisation scheme to encourage whistleblowers to come forward for all types of financial crimes were originally proposed by the SFO in its 2025-2026 business plan. The law enforcement agency outlined its intention to “progress whistleblower incentivisation reform” over the course of the 2025-26 financial year.

Commenting on the consultation, Melanie Ryan, financial crime and investigations expert at Pinsent Masons, said: “The government’s support for the introduction of a SFO whistleblower incentivisation scheme echoes that of numerous other governments around the world, including in the US and Canada. This demonstrates the commitment of both law enforcement and now government to encourage people to come forward, underlining the value placed on information received from whistleblowers in the drive to improve compliance and accountability.”

This consultation also seeks views on whether the new incentivisation scheme should, like the HMRC scheme, not impose a cap on the maximum value of awards. Other proposals include creating a criminal offence for those who harass or intimidate whistleblowers, and whether a new criminal offence should be introduced for individuals who knowingly make false reports under the SFO’s scheme.

Hinesh Shah, fraud, financial crime and forensic accounting specialist at Pinsent Masons, said the latest consultation pointed to the government’s ongoing commitment to tackle significant fraud and financial non-compliance in the UK. “The consultation suggests the UK is continuing to move towards a more intelligence-led approach to tackling economic crime,” he said. “Coming shortly after HMRC introduced financial incentives for tax whistleblowers, it signals a broader recognition of the role whistleblowers can play in identifying wrongdoing. For businesses, the direction of travel is clear: effective whistleblowing arrangements are becoming an increasingly important part of fraud prevention and corporate governance.”

The consultation will close on 8 January 2027 and the government plans to publish a formal response setting out next steps later in the year.

The SFO has jurisdiction in England, Wales and Northern Ireland, but not Scotland. However, the consultation paper outlines that individuals who come forward under the proposed incentive scheme could be eligible for a financial reward “regardless of where they are based or where the information originates”, provided they meet the scheme’s eligibility criteria.

These criteria include whether the individual has a legal duty to report the information; whether they were culpable in the offence that their disclosure relates to; whether they have a serious criminal conviction; whether they are an authorised covert human intelligence source; or if they have obtained the information through dishonest means.

In a timely move, on 13 October – the day after the consultation launch – the SFO published a new version of its corporate cooperation guidance, which was first introduced in April 2025. The revised guidance establishes a new route for legal representatives to communicate directly with the SFO’s director of legal services when considering whether to self-report suspected fraud, bribery and corruption It effectively allows corporates to road-test, on an anonymous basis if they wish, whether they should be self-reporting.

The new guidance also provides an updated picture of what good corporate cooperation looks like. The guidance makes it clear that corporates must proactively consider key areas of risk and take proportionate steps to reassure themselves and the SFO that “the full extent of any potential criminal liability has been reported”. It follows that there is a need for corporates to consider conducting an internal investigation into what may have transpired and subsequent full candour with the SFO of what is then found.  

In addition, the revised guidance expands on what needs to be shared with the SFO during an internal investigation.  Whereas previously, the guidance provided that corporates should consult with the SFO before conducting witness interviews, now corporates also need to consult with the SFO on “other investigative steps” in addition to witness interviews. It is not clear what these steps might be, but it would be prudent for corporates to assume that any step which might prejudice an SFO investigation would need to be shared with the agency in advance. 

Overall, the new guidance emphasises that corporates who report promptly and cooperate fully will be invited to enter negotiations for a deferred prosecution agreement (DPA), save in exceptional circumstances. Matthew Wagstaff, the SFO’s incumbent director of legal services, said businesses would now have “a swifter, clearer path” to enter negotiations for potential DPAs.

Ryan said that the timing of the SFO’s publication – the day after the government announced its own consultation on whistleblowing – is unlikely to be coincidental. “It makes sense for the SFO to release revised guidance that further encourages and facilitates self-reporting and DPAs – ‘the carrot’ – at the same time as the government proposes financial incentives for whistleblowers – effectively ‘the stick’ for those corporates which aren’t minded to self-report.”