HMRC's whistleblower rewards up the ante for businesses

HMRC published guidance relating to the scheme last November which came into effect on Monday. Under the scheme, individuals that report serious tax avoidance or evasion to HMRC that results in the authority collecting at least £1.5 million in unpaid tax, could get a financial reward of between 15 per cent and 30 per cent of the tax collected.

Whistleblower reward schemes have been operated by US and Canadian authorities for years. The HMRC scheme is the first such UK scheme to be introduced that is focused on economic crime, though the Competition and Markets Authority already offers financial rewards of up to £250,000 for information about cartel activity.

The introduction of the scheme is a clear signal of the UK authorities’ increasing reliance on whistleblowers as a source of intelligence in tackling economic crime and tax non‑compliance.

This sits against a backdrop of a marked rise in whistleblowing activity more generally, with organisations already grappling with a greater volume and wider range of complaints.

The introduction of enhanced financial incentives is likely to accelerate this trend further, particularly where individuals perceive a tangible benefit or might otherwise have been deterred from reporting concerns by fears about job security or longer‑term career impact.

The scheme also reflects a broader policy direction. HMRC’s move mirrors developments elsewhere in the enforcement landscape, including the Serious Fraud Office’s (SFO) plans to explore whistleblower incentivisation as part of its 2025-26 business plan.

Together, these initiatives point to a more intelligence‑led enforcement environment in the UK, one that increasingly borrows from overseas models and places a premium on early, credible information from inside organisations.

While this scheme relates to tax and is specific to HMRC, it is indicative of a trend towards a more US-style model and will have an impact on corporates’ wider whistleblowing programmes.

The incentives for employees to “blow the whistle” on corporate practices are greater than ever before. The current economic environment of global volatility, workforce restructurings and redundancies may further heighten this risk, creating the potential for “disengaged or departing employees” to “look to whistleblowing to compensate for future lost income”.

The increased risks require businesses to take action and against this backdrop robust internal reporting mechanisms and clear triage processes will be critical. Organisations will need to demonstrate that concerns can be raised safely and taken seriously internally, while ensuring that resources are focused on identifying and investigating the most serious allegations.

With HMRC incentives now in play, and a potential SFO scheme on the horizon, businesses that fail to get this balance right may find themselves responding to external regulatory scrutiny at an earlier stage, and with less control over the narrative.

David Lister, Partner and economic crime specialist at Pinsent Masons