THE taxman received a record number of tip-offs last year from households snitching on friends and neighbours.
HMRC gives cash to people who provide evidence of tax fraud.
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In 2024-25, there were reportedly over 164,670 reports to its fraud hot line, marking a 9% increase year-on-year.
That is according to analysis by accountancy firm Price Bailey, which was first published in The Telegraph.
The number of households ratting out their peers has reached a record high, but the amount of cash doled out by the HMRC has slumped.
Last year, the tax office handed out a total of £852,438 to whistleblowers. This is down 13% compared to the 2023-24 period.
Tax fraud can be reported online through the government’s website or you can ring the HMRC hotline on 0800 788 887.
Individuals can report a number of offences, including tax credit and child benefit fraud and tax avoidance or evasion.
You do not have to give your personal details and any information you do give will be kept private and confidential.
HMRC will then access what to do next and will make a decision on whether to pay the person who reported it.
Typically, HMRC only pays discretionary awards based on factors such as the amount of tax recovered and the time saved in investigations
The Sun has asked HMRC for more information on how much individuals receive for reporting tax fraud and will update this piece when we hear more.
HMRC is plotting a shakeup around how it rewards individuals for reporting fraud.
Earlier this year, the taxman unveiled plans for a new reward scheme for those who make reports.
The scheme is similar to a practice carried out in the US, with whistleblowers receiving a percentage of the tax recovered.
This is expected to be rolled out by the end of the year.
What is considered tax fraud?
Tax fraud is like tax evasion – this is where someone avoids paying the government.
Someone who commits tax fraud will have deliberately avoided paying the government.
Tax fraud, according to HMRC, includes:
- deliberately submitting false tax returns
- falsely claiming repayments or tax reliefs
- hiding income, gains or wealth offshore
- smuggling taxable goods
If someone is found guilty of committing tax fraud they could face financial penalties or even criminal conviction and imprisonment.
If you are being investigated by HMRC for potential tax fraud, it will notify you via letter.
HOW TO REPORT TAX FRAUD
If you have any information about tax fraud you can report it online via the government website.
You can fill in the online form to tell HMRC what you know about the person or business.
It helps if you share your name, location and contact details. HMRC can then contact you if they need more information.
You do not have to give your personal details. Any information you do give will be kept private and confidential.
You can also call the fraud hotline on 0800 788 887.
