HMRC’s new whistleblower reward scheme isn’t without risks

Writing in The Times, Partner, Nick Barnard considers the viability of HMRC’s new Strengthened Reward Scheme, in which whistleblowers can receive significantly higher payouts than before.

The scheme – inspired by the US model – assumes there is a “rich seam of untapped intelligence that might lead to the recovery of significant amounts of unpaid tax, if only there were sufficient incentive to entice would-be informants”, says Nick. However, it fails to acknowledge the challenge of paying informants, who fear being professionally blacklisted – when there is no guarantee that a tip-off will result in any tax recovery and therefore reward.

Nick queries whether HMRC would be better off focusing on existing intelligence and enforcement capabilities, given that tips received will not be “oven-ready settlements or convictions” but will require “significant independent work to progress”, with careful scrutiny of the informant’s credibility and motives. If the whistleblower then gives evidence, there will be the usual cultural opposition to cooperating witnesses.

“Whilst a reward scheme may appear risk-free – you only pay for what you recover – this needs to be offset against the resource that will be expended on investigating reports, the quality of which will vary from good, to speculative, to out-and-out vexatious. It is one thing for a case to fail or fizzle out on the back of your own work, but another where it relied upon a questionable source.”

Although whistleblowing might seem like a guaranteed win, Nick concludes, it is not. HMRC must be ready to explain the missed opportunities as well as lauding the successes and, if the scheme fails to deliver, it will face questions on the opportunity cost and what else can be done to combat serious tax fraud and evasion.

Nick Barnard‘s full article was published in The Times on 11th December 2025.