Informants could receive up to 30% of taxes collected as a result of their tips, with details of the scheme expected to be announced at the Budget on November 26.

The move marks a significant policy shift for the UK, which has traditionally opted against large-scale rewards, expecting people to report wrongdoing without financial incentives. Lawyers and prosecutors have long argued for such a programme to increase successful prosecutions for economic crime.

This initiative is part of Chancellor Rachel Reeves’ efforts to fill a fiscal hole estimated at between £20 billion and £30bn. The government loses approximately £47bn a year from unpaid taxes, with tax evasion alone costing an estimated £5.5bn in 2022-23.

The Treasury explicitly stated in March it would “take inspiration” from successful US and Canadian models. HMRC officials met with US agencies, including the Internal Revenue Service (IRS), over the summer to study their programmes. Since 2007, the IRS scheme, which also offers 15-30%, has recovered $7.4bn (c. £5.6bn) from $1.3bn (c. £1bn) awarded to whistleblowers.

Existing UK incentive schemes, including one at HMRC, are not well publicised and offer small rewards; HMRC paid out less than £1 million (c. £760,000) to informants in 2023-24. By comparison, the largest single US reward from the Securities and Exchange Commission in 2023 was $279m (c. £212m). The new programme will run in parallel with the old one but will target higher-value tax fraud.