Companies and individuals that are careless or even illegal in their tax affairs need to watch out. New figures show that HMRC has paid out £1.4 million in rewards to whistleblowers of tax illegality.
A record number of reports were made to HMRC in the 2025-26 tax year, hitting 170,992. This is likely due to the fact that the last Budget saw the government strengthen a reward scheme for tip-offs. Informants now receive between 15% and 30% of the value of the extra tax collected, although payouts only apply if they lead HMRC to recover more than £1.5 million in tax.
HMRC have also just released a two-minute YouTube video as a ‘general explainer’ on the scheme. It is aimed at employees, family members, friends or acquaintances of high-net-worth individuals or businesses engaged in suspected serious tax evasion or avoidance. It sets out what the scheme is, what rewards eligible informants could receive and how any information provided may help HMRC to tackle the tax gap and fund vital public services. The video can be found here.
If you’re thinking, “this doesn’t apply to me, there’s no way HMRC could ever believe I would owe them more than £1.5 million,” you might want to think again. Recent HMRC figures on the tax gap – the difference between the tax owed and the amount actually collected – showed that small businesses made up the largest share of uncollected tax, two-thirds of the £59.2 billion shortfall. This means that SMEs are firmly on HMRC’s radar and remember that they can select companies at random for tax investigations. They don’t always need a tip-off or to suspect that they will find a huge some of money owing to trigger an investigation.
To stay protected you should both conduct your tax affairs honestly, with the help of a qualified accountant like our team members here at E R Grove, and take out Fee Protection Insurance to cover your costs in the event of an investigation, whether warranted or random.
Just in case you’re wondering, be reassured that we do not secretly ‘tip off’ HMRC about clients! If a serious tax-compliance concern could not be resolved with you, we would normally cease to act, while still complying with any legal reporting obligations.
Should you be unsure of your tax position and need advice, please get in contact. We’re here to help.
