A bold new proposal could see UK workers financially rewarded for exposing tax-dodging bosses, as the government aims to tackle rising tax avoidance and close the country’s record £39.8 billion tax gap.
In a recent speech to the Chartered Institute of Taxation, Exchequer Secretary to the Treasury James Murray announced that HM Revenue & Customs (HMRC) will launch a new whistleblower reward scheme later this year, inspired by successful models already in place in the United States and Canada.
Whistleblowers Could Get 25% of Recovered Tax
While full details are yet to be released, reports suggest the scheme could offer whistleblowers up to 25% of the tax recovered thanks to their tip-off. The policy is aimed squarely at serious tax non-compliance involving large corporations, wealthy individuals, offshore accounts, and complex avoidance schemes.
“The scheme will complement our existing rewards programme, with informants rewarded with a percentage of any tax taken as a result of their actions,” said Murray.
This approach mirrors the IRS Whistleblower Program in the U.S., which has paid out millions of dollars to informants since its inception.
UK Tax Gap at Record High
The scheme comes in the wake of HMRC’s newly released Measuring Tax Gaps 2024 report, which estimates the UK lost £39.8 billion in tax revenue during the 2022-2023 financial year. This figure represents the difference between the tax HMRC is owed in theory and the actual amount collected.
The biggest share of this gap is attributed to errors and failure to take reasonable care by self-assessment taxpayers, including individuals and unincorporated businesses.
Industry Reaction
Senga Prior, chair of the Association of Tax Technicians Technical Steering Group, welcomed efforts to reduce the tax gap but highlighted the need for broader reforms.
“There is no magic quick fix… but a starting point would be improving HMRC customer services and providing access to agents to the full range of digital services, along with simplifying the tax system,” she said.
Prior also noted that calculating the tax gap is “an imprecise process,” with past estimates revised annually based on new data.
Public Response and Ethical Questions
News of the upcoming scheme has sparked debate on social media and workplace forums. While some applaud the move as a long-overdue crackdown on high-level avoidance, others raise concerns about trust and workplace ethics.
One X user posted: “If my boss is dodging tax and I can earn 25% for speaking up? I’m calling HMRC before lunch.” Others argued that the government should focus more on simplifying the tax code and resourcing HMRC to act more proactively.
What Happens Next?
The whistleblower scheme is set to launch later in 2025, with formal guidance and eligibility criteria expected to be released in the coming months. It will build on HMRC’s current reward programme, which already allows for limited financial rewards, but on a case-by-case basis.
For now, the message from the Treasury is clear: if you see tax dodging, speaking up could literally pay.
