Inspired by a long-standing scheme in the United States, the government hopes this new incentive will encourage individuals working with wealthy clients or multinational firms to expose illicit practices.
In the US, whistleblowers have earned staggering sums: in the 2022-23 fiscal year, the Internal Revenue Service (IRS) paid out $89 million (about 68 million) to 121 informants, an average of over 500,000 each. Their tips helped the US government recover an additional $338 million (roughly 261 million) in tax, including a single case worth $263 million in which three individuals equally split a $74 million (57 million) reward.
In contrast, the UK’s existing reward system paid out just under 1 million in total last year, an amount deemed too low by many. Andrew Park, a tax investigations partner at Price Bailey, believes that “truly major frauds” are likely to remain hidden unless potential whistleblowers see meaningful returns: “They need a pretty major incentive to blow the whistle,” he said, noting that the risks can include exposure to criminal gangs.
James Murray, Exchequer Secretary to the Treasury, emphasised that tax fraud “rips off everyone who plays by the rules”. He said: “As is the case in the US and Canada, our new approach will make sure people are incentivised to do the right thing and help the...
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