The UK Treasury has announced a new initiative aimed at incentivizing whistleblowers to report tax fraud and avoidance by offering rewards of up to 25% of any extra revenue collected. This approach is modeled after a successful U.S. scheme, where whistleblowers have received significant payouts. Despite the existing UK reward system, payouts are much lower compared to the U.S. This change, backed by an additional £1.4 billion to empower HM Revenue & Customs, aims to bolster compliance and increase tax revenue, reflecting serious concerns over dwindling integrity in tax practices.
In the 2022-23 fiscal year, the IRS paid out $89 million to 121 informants, showcasing the financial rewards of whistleblowing on tax fraud, an incentive now being mirrored in the UK.
James Murray asserted that tax fraud 'rips off everyone who plays by the rules,' underpinning the motivation behind enhancing whistleblower incentives in the UK to combat tax avoidance.
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