One aspect of last week’s Budget that garnered little attention was the announcement of a new reward scheme for whistleblowers who provide valuable information that allows HMRC to tackle serious tax avoidance and evasion.

The scheme, modelled on that operated by the US Internal Revenue Service, will offer whistleblowers up to 30 per cent of any tax amounts collected over 1.5mn on the back of the information provided.

If used effectively by HMRC, this could be a hugely positive and potentially transformative development for the detection and deterrence of high-value tax evasion and, eventually, other high-value financial crimes in the UK.

HMRC has long held the power to pay rewards to whistleblowers, as has the Competition and Markets Authority in a cartel context, but HMRC’s previous scheme was not widely publicised and payouts were modest.

HMRC paid out just 852,000 to parties providing actionable information in the 2024 tax year. The IRS, meanwhile, paid out $124.5mn from October 2023 to September 2024 for information that helped recover $474.7mn.

In a different US context, the Securities and Exchange Commission paid $279mn to a single whistleblower whose information and assistance led to the successful enforcement of SEC and related actions in 2023.

There is a historic cultural and institutional reluctance in the UK to embrace the US style and scale whistleblower payouts.

Such reluctance is often framed in terms of concerns that large payouts will result...

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