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The Autumn Budget confirmed further details of HMRC's new reward scheme for whistleblowers. The programme, trailed earlier this year to mark HMRC’s 20th anniversary, signals a much stronger stance on encouraging whistleblowers to come forward, raising the stakes for businesses to ensure robust tax compliance and effective internal governance.
The introduction of this scheme marks a clear departure from the UK's traditional reluctance to pay whistleblowers. Historically, the prevailing culture has been that individuals should report wrongdoing out of a sense of civic duty, not for financial gain.
The FCA, for example, has previously been firmly of the view that providing financial incentives to whistleblowers would not improve the number or quality of whistleblowing reports. Rejecting calls to pay rewards, the FCA cited concerns over malicious reporting, entrapment, conflicts of interests in any subsequent criminal prosecution, and public perception.
However, momentum for change has been building. Across the pond in the US, incentivising whistleblowers to disclose corporate wrongdoing with monetary awards has emerged as a key mechanism for exposing financial crime.
HMRC are not the only UK organisation looking at potentially following the US’ lead. The SFO’s latest business plan confirms that they too will be progressing whistleblower incentivisation reform and the government’s Anti-Corruption Strategy 2025 states that it will be considering introducing financial incentive schemes for whistleblowers reporting economic crimes over the next five years. Even the FCA’s Chief Executive has said he is “not in principle opposed” to remunerating whistleblowers, signalling a shift in their long-standing view.
While HMRC already has a framework in place to reward individuals for information, this scheme is operated on a discretionary basis and is not widely publicised, with little transparency around eligibility or the calculation of rewards.
The Strengthened Reward Scheme, confirmed in the Autumn Budget 2025, is set to complement the existing HMRC rewards framework but target large-scale non-compliance. For cases where tax over £1.5 million is recovered, informants are set to be rewarded with up to 30% of the additional tax taken as a result of their actions.
The benefit is twofold: it will provide financial support to whistleblowers who may face economic hardship after making a disclosure, while also enabling the government to recover unpaid taxes and reduce the tax gap.
The introduction of a more substantial and widely publicised reward scheme by HMRC creates a powerful incentive for workers to report suspected tax irregularities directly to HMRC. For employers, the key risk is that the prospect of a substantial financial reward may lead workers to bypass internal reporting channels entirely.
Although this will not necessarily affect a whistleblower’s protection under employment law (as individuals can still be protected from dismissal or suffering detriments for disclosures made directly to HMRC, even if they have not raised the concern internally first), it would deprive employers of the chance to address and resolve issues internally at an early stage.
Consequently, the first indication an employer might receive of a potential tax compliance problem could come directly from HMRC, increasing the risk of reputational harm and limiting an employer’s ability to manage the situation out of the public eye.
The lure of financial incentives could also prompt a rise in speculative or opportunistic claims made to HMRC by employees. However, for protection under employment law, the whistleblower will need to hold a reasonable belief that the information is substantially true. This should act as a brake on purely malicious reporting.
Similar to how programs have worked in the US, HMRC also require the whistleblower to provide their identity in order to be eligible for a reward, providing additional safeguards against potential misuse of the scheme.
With the new scheme as mentioned in the Autumn Budget set to take immediate effect, employers might anticipate increased scrutiny from their workforce with employees potentially becoming more motivated to blow the whistle to HMRC.
16 December 2025
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