UK Treasury plans multimillion-pound rewards for tax fraud whistleblowers

The UK Treasury has announced a new whistleblower reward scheme aimed at combating tax avoidance and fraud, inspired by successful models in the US and Canada. Informants will receive up to 25% of the extra tax collected as a result of their reporting, a significant increase from the current compensation system which paid out just under £1 million last year. In contrast, the US Internal Revenue Service awarded $89 million to 121 whistleblowers in the 2022-23 fiscal year, showcasing the potential for substantial financial rewards. Exchequer Secretary James Murray emphasized the need for a stronger incentive to encourage individuals to report tax fraud, which he described as a crime that affects compliant taxpayers. The government is also raising the self-assessment tax return threshold for individuals with side hustles from £1,000 to £3,000, aiming to ease administrative burdens for around 300,000 taxpayers. This initiative is part of a broader effort to close the tax gap and increase revenue collection, with an additional £1.4 billion allocated to HM Revenue & Customs over the next five years.