Government announces cash reward scheme for whistleblowers who expose tax avoidance and fraud

11 March 2025, 23:55 | Updated: 11 March 2025, 23:58

The government is set to offer employees of wealthy bosses and multinational businesses thousands of pounds for exposing tax avoidance and fraud under a new scheme.

The Treasury's plans for a whistleblower scheme are based on the US-based model encouraging people to speak out.

They will receive up to 25% of the extra tax raised in return for coming forward, according to The Times.

Whistleblowers in the US have received vast sums of cash in the reward scheme across the Atlantic.

In the 2022-23 fiscal year, the Internal Revenue Service in the US paid $89 million (£68 million) to 121 whistleblowers, amounting to $735,537 (£568,000) each.

The whistleblowers had given information that enabled an extra $338 million (£261 million) in tax collection.

Last year, the IRS a single individual was forced to return $263 million, with three informants splitting a $74 million (£57 million) reward between them.

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James Murray, Exchequer secretary to the Treasury, said: “Tax fraud is a crime — it rips off everyone else who plays by the rules.

"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 government to tackle tax avoidance head on. This new scheme helps deliver our plan for change, by supporting economic growth and putting more money in people’s pockets.”

It comes as the government announced that around 300,000 people with side-hustles would be exempt from filing tax returns.

Mr Murray announced the plans to triple the Self Assessment reporting threshold for trading income from £1,000 to £3,000.

The Government believes this will slash admin for hundreds of thousands of people with ‘side hustles’, like influencers or those trading old clothes online, baking cakes or dog-walking.

The tax thresholds will not change but the Government sees this as a way to slash red tape and make the tax system simpler for people. The move is part of bigger plans to reform HMRC and Mr Murray will announce it as part of a speech to mark the 20th anniversary of the HMRC.

Mr Murray’s speech comes ahead of the Chancellor’s Spring statement later this month where Rachel Reeves will present the watchdog’s economic forecast which is expected to be difficult for the Government. Ms Reeves is also expected to slash welfare payments and cut the civil service headcount.