HM Revenue & Customs ("HMRC”) has introduced a new Strengthened Reward Scheme (the "Scheme") for tax evasion cases, which may provide a guide to how expanded whistleblower incentivisation schemes could work for a wider range of criminal investigations.

The Wider Context

Historically, the UK has offered only limited financial incentives for whistleblowers, restricted primarily to HMRC’s scheme for reporting tax fraud and the Competition and Markets Authority’s ("CMA") rewards for exposing illegal cartels. These schemes have not been widely publicised, and rewards have typically been discretionary and modest. There has been no formal framework for financially incentivising individuals to report other types of suspected criminal conduct – such as bribery or fraud – directly to enforcement authorities.

Instead, the responsibility has largely fallen to corporates to develop internal reporting mechanisms as part of their “adequate procedures” or “reasonable procedures” maintained by them to avoid committing the corporate offences of failing to prevent bribery or fraud. It is then up to these corporates to decide whether to report matters to the authorities. As a result, the number of publicised investigations into suspected bribery and fraud arising from whistleblower reports (as opposed to self-reports by corporates) has remained low.

A July 2025 independent review commissioned by the UK Government highlighted the limitations of the current system, and in its Anti-Corruption Strategy published this month, the UK Government has indicated that it is exploring opportunities to reform the UK whistleblowing framework, including through the possible introduction of financial incentives. The Director of the Serious Fraud Office ("SFO"), Nick Ephgrave, has acknowledged that the lack of incentives may be significantly reducing the number of leads received, and has strongly advocated for the introduction of a US-style whistleblower incentive programme to encourage the reporting of economic crime.

Key Features of the HMRC Strengthened Reward Scheme

Under the previous model, HMRC operated a discretionary payment scheme for informants, but eligibility criteria were not transparent, and awards were typically small, with no set formula linking payments to the amount of tax recovered. In the 2023/24 tax year, total rewards paid amounted to approximately £1 million.

The new Scheme, modelled on the US Internal Revenue Service approach, allows individuals (still referred to as ‘informants’ rather than ‘whistleblowers’) who provide information leading to the recovery of at least £1.5 million in tax in serious tax avoidance or evasion cases to receive between 15% and 30% of the tax collected (excluding penalties and interest). HMRC has emphasised that awards remain discretionary and are not guaranteed.

Eligibility: Who May Claim Rewards?

HMRC makes clear that the types of tax avoidance or evasion within the scope of the Scheme typically involve large companies, wealthy individuals, or offshore and avoidance schemes – in other words, complex tax cases of significant scale.

It will not apply in the following circumstances:

• Civil servants or government contractors who obtained information through their work.
• Taxpayers involved in, or who planned or initiated, the tax evasion or avoidance.
• Where the information is already known to HMRC or could have been discovered through routine checks.
•  Where any reward could directly or indirectly fund illegal activity.
• Where disclosure is legally required or prohibited.
• Where the whistleblower is acting on behalf of someone else.
• Where the information comes from someone who would not be eligible for a reward.
• Where the information is provided anonymously (anonymous reports are accepted, but no payment will be made).

Potential Impact: Will the SFO Introduce a Whistleblower Incentivisation Scheme?

The SFO is expected to monitor the progress of HMRC’s Scheme closely. The introduction of a whistleblower incentive scheme is a stated priority in the SFO’s 2025–2026 Business Plan, and this intention has been repeatedly reaffirmed by its Director, who has highlighted the evidential benefits of receiving first-hand accounts directly from whistleblowers and the potential efficiency savings.

The SFO’s view that whistleblowers are an underutilised source of intelligence is supported by its Annual Report on Whistleblowing Disclosures for 2024–25, published on 12 November 2024. The report shows that the Intelligence Division managed 167 qualifying whistleblowing disclosures (down from 182 the previous year),¹ and took some form of action in 153 of these cases (although details of these actions are not publicly available). The 2024–25 Annual Report also notes that the Intelligence Division received approximately 1,450 referrals during the year, with whistleblowing accounting for just over 10% of these.

However, ethical concerns about incentivising whistleblowers persist, including fears that financial rewards may undermine witness credibility, encourage false or malicious reports, create conflicts of interest, or lead to the misuse of confidential information. It cannot also be assumed that financial rewards will necessarily increase reporting in the UK. The CMA, for example, increased its maximum reward from £100,000 to £250,000 in 2023, likely in response to lower than expected numbers of whistleblower approaches.

Conclusion

The UK has long resisted the US model of rewarding whistleblowers, often citing cultural differences and the belief that whistleblowing is a moral duty. Concerns remain that introducing rewards could undermine witness credibility, encourage unreliable tip-offs, or result in a programme that is costlier than its benefits. Nevertheless, the Scheme may signal the beginning of a shift in approach.

¹ To be included in the SFO’s report, a disclosure must be one where the worker reasonably believes the information is substantially true and concerns serious or complex fraud (including bribery, corruption, or proceeds of crime). The SFO Director must also reasonably believe the worker made the disclosure in the public interest and that it indicates a criminal offence, miscarriage of justice, or similar failure, provided legal professional privilege is not breached and no offence is committed by the disclosure.