HOUSEHOLDS can get paid thousands for snitching on neighbours and tax dodgers under a new reward scheme.
It was confirmed in last week’s Budget that people who tip off HMRC on high-value tax fraud will get a reward of up to 30% of the tax recovered.
The Strengthened Reward Scheme came into force immediately after the Budget on November 26.
It’s part of a major crackdown by ministers on tax fraud, which currently costs the Treasury around £47billion a year.
The new scheme brings the UK in line with the US and Canada, where whistleblowers receive a “bounty” reward for successfully snitching on tax evaders.
Major law firm Leigh Day said it had already been contacted by several potential informants looking for advice on whistleblowing since it came into force.
How does the reward scheme work?
The scheme incentivises people to tip-off HMRC on major tax fraud activity by offering significant cash rewards.
You may get rewarded if the taxman recovers more than £1.5million from your tip-off.
This can be between 15-30% of the tax collected, excluding penalties and interest.
However, the rewards are given out at HMRC’s discretion and are not guaranteed.
HMRC says tax avoidance or evasion worth over £1.5million normally involves wealthy individuals, large companies, or offshore schemes.
There are some exemptions to the including if:
- You got the information while working as a civil servant
- You are involved in the tax fraud
- The information may already be known to HMRC or could have been found through routine processes
- You’re acting on behalf of someone else
- You are required by law to disclose, or not disclose, the information
- The reward might be directly or indirectly linked to funding illegal activity
- You got the information from someone who would not have been eligible for a reward themselves
You can report tax fraud anonymously, but you won’t be paid for doing so. But any information you do provide will be kept private and confidential.
HMRC warns whistleblowers must not try to find out more about the activity they are reporting, or let anyone know they are making a report.
How to make a report
If you suspect someone of tax fraud, you can make a report on the GOV.UK website.
You will be asked to include a description of the type of activity you are reporting, how long it has been going on for, and how you found out about it.
You will also need to explain what your relationship is to the business or individual, and any supporting information you may have.
You can’t add any attachments, but you can tell HMRC of any documents you have that could support their investigation.
An estimate of the total value of the activity you’re reporting should also be included.
The information you provide should be “detailed and easy to understand”, HMRC adds.
Previously, rewards for reporting tax fraud in the UK were not linked to the amount of tax collected and the amount of cash handed out in rewards was minimal.
The new scheme comes after HMRC received a record number of tip-offs on tax fraud last year – but the amount of cash handed out as rewards dropped.
Last year, for instance, the number of people snitching on friends and neighbours over tax affairs reached a record high, but total cash rewards slumped.
In 2024-25, the tax office handed out a total of £852,438 to whistleblowers – down 13% compared to the 2023-24 period.
But there were a record 164,670 reports made to HMRC’s fraud hot line, according to analysis by accountancy firm Price Bailey – up 9% from the previous year.
What is tax fraud?
TAX fraud occurs when someone deliberately avoids paying tax to the government.
This can include:
- deliberately submitting false tax returns
- falsely claiming repayments or tax reliefs
- hiding income, gains or wealth offshore
- smuggling taxable goods
Anyone found guilty of committing tax fraud could be fined or even get a criminal conviction and face going to prison.
If you are being investigated by HMRC for potential tax fraud, it will send you a letter notifying you of this.
