On 11 March 2025, James Murray MP, Exchequer Secretary to the Treasury, announced at the Chartered Institute of Taxation that HM Revenue & Customs (HMRC) plans to introduce a formal whistleblowing reward programme. Drawing on successful models from the United States and Canada. This initiative forms part of the government’s wider objective to reduce the UK’s tax gap particularly in relation to serious non-compliance by large corporates. As well as, high net worth individuals, offshore arrangements and avoidance schemes.
Current HMRC reward scheme
At present, section 26 of the Commissioners for Revenue and Customs Act 2005 allows HMRC to make discretionary payments to individuals who tip off the department about suspected tax fraud. However, this system does not link awards to the amount of tax recovered. Consequently, whistleblowers cannot rely on a definite payment, since HMRC assesses each case on its own merits and may decline to pay.
Proposed percentage-based awards
Under the new scheme, HMRC may introduce structured, percentage-based rewards. Officials have yet to publish full policy details. They confirm that award levels will correlate directly with the additional tax and penalties HMRC recovers thanks to the whistleblower’s intelligence. Moreover, this transparent approach will offer clearer incentives for insiders to provide credible and actionable information.
Comparison with the US IRS programme
The United States Internal Revenue Service (IRS) currently awards whistleblowers between 15 % and 30 % of the recovered sums in cases where tips generate at least USD 2 million. The UK scheme will draw on this structure, yet HMRC has not finalised the precise percentages or eligibility thresholds. In addition, the IRS model underscores the value of substantial recoveries in powering meaningful rewards.
Canadian model
Similarly, Canada’s Revenue Agency (CRA) operates a reward system that pays incentives for information leading to successful investigations and tax recoveries. The CRA’s administrative guidance sets out award rates and qualifying conditions, which the forthcoming UK rules will reference. Thus, HMRC can leverage best practices from both North American programmes.
Intended outcomes
By aligning reward levels with recoveries, the government expects to enhance HMRC’s ability to detect and pursue serious tax non-compliance. In turn, this will strengthen the department’s enforcement toolkit and deter avoidance and fraud. Ultimately, insiders with direct exposure to illicit schemes will possess a clear financial motive to come forward.
Next steps
HMRC are expected to publish legislative and administrative details during 2025.