HMRC’s Strengthened Reward Scheme For Reporting Tax Fraud

The autumn Budget 2025 quietly introduced a powerful incentive for whistleblowers. From 26 November 2025, anyone who provides HM Revenue & Customs (HMRC) with credible intelligence about serious tax avoidance or evasion could receive a portion of the recovered tax. The Strengthened Reward Scheme is modelled on successful programmes in the United States and Canada and offers a significant change from the UK’s old discretionary payment system. 

Below we explain what tax fraud looks like, how the new scheme works, who is eligible, and how to report concerns.

What counts as tax fraud?

HMRC defines tax fraud as deliberately and dishonestly seeking a tax advantage by concealing or misrepresenting information. Fraud can take many forms, for example:

• Submitting false returns – intentionally misstating income or expenses.
  
• Falsely claiming refunds or reliefs – inventing deductions or reliefs you are not entitled to.
  
• Hiding income or wealth offshore – moving money abroad or using complex structures to conceal profits.
  
• Smuggling taxable goods – importing or moving goods without declaring them or paying due duties.
  

The UK’s tax gap (the difference between tax owed and tax collected) was estimated at £46.8 billion in 2023–24. Tackling fraud helps fund public services and create a level playing field for honest businesses.

How the Strengthened Reward Scheme works

The new system offers a percentage-based reward for information that leads to the recovery of substantial unpaid tax. Key features include:

• Reward range: Informants may receive 15% to 30% of the tax collected, excluding penalties and interest. For example, a tip that helps recover £2 million could yield a payment of £300,000–£600,000.
  
• Minimum threshold: The information must lead to HMRC collecting at least £1.5 million in tax. HMRC says such cases usually involve large companies, wealthy individuals or complex offshore arrangements.
  
• No upper cap: There is no maximum payout – the award increases with the tax recovered.
  
• Discretionary payment: Unlike US programmes, HMRC retains discretion. A reward is not guaranteed even if the threshold is met.
  
• Transparent criteria: HMRC publishes factors that determine the final percentage, such as the quality of information provided and the whistleblower’s assistance during the investigation.

This approach is intended to encourage insiders to come forward with high‑quality intelligence while maintaining flexibility for HMRC to manage the scheme.

Eligibility: Who Can and Cannot Claim a Reward

Who may qualify

You could be eligible for a reward if you:

• Provide original, specific and verifiable information that HMRC does not already know.
  
• Are not involved in the tax avoidance or evasion yourself.
  
• Are not a current or former civil servant who obtained the information through your government role.
  
• Submit the report under your own name (anonymous reports will be accepted but cannot receive payment).
  

Reasons you would not get a reward

HMRC sets out clear exclusions:

• You are the taxpayer involved or were part of the scheme.
• You obtained the information while working for the government or as a contractor.
• The information could be found through HMRC’s routine processes.
• You are acting on someone else’s behalf.
• Providing the information would breach legal disclosure rules.
• The reward might indirectly fund illegal activity.
• You submit the report anonymously.

Even if you are ineligible for payment, HMRC encourages anyone with knowledge of tax fraud to report it.

How to Report Tax Fraud

HMRC’s online reporting tax fraud service is the channel for submissions. Here’s what you need to know:

• Visit gov.uk/report-tax-fraud and complete the form.
  
• Provide a detailed description of the activity (up to 1,200 characters) and explain how you learned about it, your relationship to the person or business, and how long it has been happening.
  
• Estimate the total value of the suspected fraud.
  
• Tell HMRC about any supporting documents; attachments cannot be uploaded but you can describe them.
  
• Do not try to gather more evidence yourself, encourage anyone to commit a crime, or let others know you are making a report.
  
• After submission, HMRC will acknowledge receipt. They will contact you only if more information is required or if you are eligible for a reward.
  
• Investigations can take years; payment is only possible once the case concludes.
  

Implications of Whistleblowing Reward Scheme for Businesses and Individuals

The Strengthened Reward Scheme is part of a broader drive to tackle tax non‑compliance. HMRC has also announced new powers against promoters of avoidance schemes and plans to establish a dedicated small‑business evasion team. Corporate entities face criminal liability for failing to prevent tax evasion under the Criminal Finances Act 2017, with recent prosecutions reinforcing the need for robust controls. Businesses should therefore:

• Review compliance frameworks to ensure they have adequate procedures to prevent tax evasion.
  
• Assess whistleblowing policies so employees can report concerns internally before going to HMRC.
  
• Prepare for increased HMRC scrutiny, especially if operating complex structures or within high‑risk sectors.
  

Individuals with knowledge of serious fraud should seek independent legal advice before making a disclosure Acting without guidance could put your employment or legal position at risk.

How Our HMRC Tax Investigation Services Can Help

At Apex Accountants we help clients navigate the complexities of HMRC’s new whistleblowing scheme and wider tax compliance. Our team of chartered tax advisers and forensic accountants can:

• Advise on internal controls and compliance – reviewing your systems to minimise the risk of tax fraud and ensuring they meet HMRC’s six guiding principles.
  
• Develop whistleblowing policies – creating confidential reporting channels and training staff so issues are addressed internally before external reports arise.
  
• Assist with disclosures – supporting individuals and companies when making voluntary disclosures to HMRC, mitigating penalties and ensuring full cooperation.
  
• Provide representation during HMRC investigations – working with you to supply information, negotiate settlements and protect your legal rights.
  
• Offer strategic advice for whistleblowers – helping potential informants understand eligibility, prepare reports and seek legal protections.
  

Whether you are a business preparing for greater scrutiny or an individual considering a report, our experienced team can guide you through the process. Contact Apex Accountants today to discuss how we can help.

Conclusion

The UK’s whistleblowing reward scheme signifies a major step in closing the tax gap. By offering up to 30% of recovered tax to informants, the government hopes to encourage insiders to expose serious tax avoidance and evasion. Only cases recovering at least £1.5 million in tax qualify for the scheme, and rewards are discretionary. While this incentive could transform tax enforcement, it also puts pressure on businesses to ensure their tax affairs are beyond reproach. 

If you have concerns about tax compliance or need guidance on whistleblowing, speak to Apex Accountants for tailored, professional advice.

FAQs on Strengthened Reward Scheme

Is the reward guaranteed?

No. HMRC has sole discretion to decide whether to pay a reward and how much. It is not a statutory right, as it is in some US programs.

Can I remain anonymous?

Yes, you can report tax fraud anonymously via HMRC’s online form. However, anonymous whistleblowers will not receive a reward.

Do I need to gather evidence?

No. HMRC specifically asks whistleblowers not to seek additional information or encourage wrongdoing. Simply provide what you already know.

How long will it take to receive a reward?

Tax investigations are complex. HMRC warns that years may pass between sending a report and receiving any payment. The scheme is designed for high-value cases, which often require lengthy enquiries.

What if the tax recovered is less than £1.5 million?

Rewards are only considered when at least £1.5 million is collected. Smaller cases may still be investigated, but no payment is offered.

Who usually commits high‑value tax fraud?

The HMRC says such schemes often involve large companies, wealthy individuals, or offshore arrangements.

Will such an incident lead to a surge in baseless allegations?

Some commentators warn that the scheme could prompt more speculative reports. Law firms recommend businesses strengthen compliance frameworks and whistleblowing policies to manage risks and prepare for increased scrutiny.