For most of its history, HMRC’s informant scheme was a quiet affair. Payments were small, discretionary and rarely publicised. Despite receiving more than 160,000 reports of suspected tax fraud, HMRC paid out less than £1 million annually.

That has now changed. On 6 April 2026, HMRC launched its Strengthened Reward Scheme, modelled on the whistleblower programmes long used by the US and Canadian tax authorities. For wealthy individuals, family businesses and anyone with offshore interests, it represents a significant new risk.

How the scheme works

An informant whose information leads HMRC to collect at least £1.5 million in additional tax may receive between 15% and 30% of the amount recovered (excluding penalties and interest). The scheme is aimed squarely at serious, high-value non-compliance involving large companies, wealthy individuals, offshore structures and tax avoidance schemes.

The information must be original, credible and verifiable. HMRC will not pay a reward where:

• the informant is the taxpayer concerned, or the architect of the evasion or avoidance;
• HMRC already holds the information or could have found it through its routine processes;
• the informant obtained the information as a civil servant or government contractor; or
• the reward might be used to fund illegal activity.

Anonymous reports are still accepted, but an informant must give contact details to be eligible for a reward. Rewards are discretionary, are paid only once the tax has been collected, and carry no right of appeal. The Government expects to pay the first rewards in 2027/28 and anticipates collecting £225 million in additional tax by 2030/31.

Who is likely to come forward?

HMRC is not leaving this to chance. Its published explainer video is aimed expressly at the employees, family members, friends and acquaintances of high-net-worth individuals and businesses. In my experience of over three decades in tax investigations, on both sides, the most damaging information rarely comes from data-matching. It comes from people:

• Former spouses and partners, particularly during or after contested financial remedy proceedings, where disclosure obligations and strong emotions coincide.
• Current and former employees, including family office staff, PAs, bookkeepers and finance teams with access to bank statements, invoices and correspondence.
• Business partners and co-shareholders, especially following a falling-out or a disputed exit.
• Professional advisers and intermediaries, who may themselves be under pressure from HMRC’s new powers against advisers who facilitate non-compliance.

A reward of 15% to 30% on a seven-figure tax bill is a powerful incentive. Taxpayers should assume that anyone who knows about an irregularity now has a financial reason to report it.

Why this matters more than ever

The scheme does not operate in isolation. HMRC is investing heavily in data analytics and artificial intelligence, receiving offshore account information under international exchange agreements, and preparing to receive automatic data on crypto-asset holdings from 2027. An informant’s tip-off is now far more likely to be corroborated quickly.

Once HMRC opens an investigation, the taxpayer’s options narrow considerably. Penalties for prompted disclosures are substantially higher than for unprompted ones, and in the most serious cases HMRC may pursue a criminal investigation rather than a civil settlement.

What should you do?

If there is any doubt about your tax position, or that of your family or business, the time to act is before HMRC makes contact. In practice, that means:

• Review your position now. Historic offshore income and gains, undeclared rental income, trust distributions, crypto disposals (including gifts and donations) and the tax treatment of business extractions are all common areas of exposure.
• Consider a voluntary disclosure. Depending on the circumstances, this may be through the Worldwide Disclosure Facility or, where deliberate conduct is involved, under Code of Practice 9 and the Contractual Disclosure Facility, which offers protection from criminal investigation in exchange for full disclosure.
• Take advice before acting. The route chosen, and how the disclosure is framed, can make a significant difference to penalties, to the number of years HMRC can assess, and to criminal exposure.
• For businesses, strengthen internal reporting. The scheme gives employees a financial reason to go straight to HMRC. Effective internal whistleblowing channels and a responsive investigation process give a business the chance to identify and correct problems first.

Above all, do not ignore the risk because nobody has complained yet. Under this scheme, the person most likely to report you is someone you already know.

How we can help

Child & Child advises individuals, families and businesses on HMRC investigations, voluntary disclosures, Code of Practice 9 cases and criminal tax matters. We work closely with our private client, corporate, property, and dispute resolution teams to address tax risk wherever it arises, discreetly and at an early stage.

If you are concerned about your own position or that of a client, please contact Tessa Lorimer, Consultant Barrister, on TessaLorimer@childandchild.co.uk or 020 7201 1896, or Patrick TR Thornton, Partner and Head of Tax on PatrickThornton@childandchild.co.uk or 020 7201 3579 for a confidential, initial discussion.

This article is for general information only and does not constitute legal advice. Specific advice should be taken on individual circumstances.