Reeves to unveil US-style whistleblower rewards to tackle tax fraud

Chancellor Rachel Reeves is preparing to announce a landmark whistleblower reward scheme that will pay informants a share of the taxes recovered from exposing large-scale fraud — a first for 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 “Close the Tax Gap” strategy. The scheme, modelled on the successful US system, would allow HMRC to pay tipsters up to 30 per cent of any money recouped from tax evasion cases based on their information.

The move represents a major shift in Britain’s approach to whistleblowing, which has traditionally relied on moral duty rather than financial incentive.

“The new incentive programme will target higher-value tax fraud and supercharge enforcement,” a Treasury source said.

The Treasury estimates that tax evasion cost the UK £5.5 billion in 2022–23, though MPs on the Public Accounts Committee have warned that figure could be “just the tip of the iceberg.”

Across the 2023–24 financial year, the government lost £47 billion in unpaid taxes, underscoring the scale of the problem Reeves is seeking to address.

HMRC has already ramped up enforcement activity, conducting 648 raids in the past year — a 42 per cent increase from 2021–22 — and paying out nearly £1 million to informants in 2023–24, up 92 per cent from the year before.

The UK’s new whistleblower system is closely inspired by the US Department of Justice’s False Claims Act and the Internal Revenue Service (IRS) Whistleblower Program, which have recovered billions in unpaid taxes and fraud penalties.

Nick Ephgrave, then-director of the Serious Fraud Office, previously called for Britain to adopt a similar system.

“If you look at the US example, their system allows that — and I think 86 per cent 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-value individuals and corporations.

Fraud losses reached £629 million in the first half of 2025, according to UK Finance, with much of the surge driven by the use of AI-powered scams.

Reeves is expected to frame the whistleblower scheme as part of a broader campaign to make “those who owe tax pay their fair share,” while simultaneously plugging a multi-billion-pound fiscal gap.

The Treasury has not confirmed how rewards will be calculated, but sources suggested the system will be limited to serious cases of tax evasion and corporate fraud, with oversight mechanisms in place to prevent abuse.

If implemented, the plan would mark a significant cultural and operational shift for HMRC — aligning the UK with the US in recognising whistleblowers as key allies in the fight against economic crime.

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Reeves to unveil US-style whistleblower rewards to tackle tax fraud