Tax Avoidance Whistleblowers Set for 25% Incentive

13th March 2025

The government are continuing to find ways to replenish the treasury’s coffers by looking at UK businesses. Thankfully though, their new scheme is a little less controversial than their recent autumn budget measures.

Using a longstanding American tax model as a template, the government are looking to implement a scheme that allows whistleblowers to earn up to 25% of recovered tax payments from businesses.

Informants will be eligible for such payouts if their information leads to the treasury receiving money previously withheld from them via fraud or tax avoidance. The American scheme it’s based on has been a success across the pond, with the US government recovering an additional $338m in just the 2022-2023 financial year.

That same year saw $89m paid out to whistleblowers, with one $263m case in particular seeing three informants split a bumper $74m reward.

Andrew Park, tax investigations partner at Price Bailey, an international accountancy firm, seems to think it could be a shrewd move. He stated that informants “need a pretty major incentive to blow the whistle” on tax avoidance as it can potentially place them in the firing line for retaliation from criminal gangs.

A long-term target for Labour

Tackling tax avoidance has long been on the agenda for the Labour party. Their pre-election manifesto showed figures of projected revenue brought in by clamping down on tax fraud, avoidance, and non-dom loopholes. This revenue is crucial for their proposed policies to improve the NHS by investing more money into it.

It’s an easy win for a party under fire from businesses for its recent amendments to National Insurance contributions and minimum wage. It’s unlikely to court any controversy as anybody speaking out against it instantly attracts suspicion as to their own processes.

Exchequer Secretary to the Treasury, James Murray explained that “the government has allocated an additional £1.4bn to HM Revenues and Customs over five years in a bid to boost the amount of tax collected”. He added that tax avoidance “rips off everyone who plays by the rules”.

Disgruntled employees could be “dangerous” for some firms

Forbes Burton’s Senior Client Manager, Ben Westoby said of the proposed changes that “the scheme seems to have done well on the other side of the Atlantic, so it makes sense to try it over here. Employees in the financial departments of certain firms could end up being treated very well, as a disgruntled staff member may suddenly become very dangerous for businesses not fulfilling their tax obligations”.

Need help navigating new policy changes?

With a raft of policy changes due in April, UK businesses would be wise to start preparing now. Increases in National Insurance contribution payments and National Minimum Wage have been chief among business owners’ worries recently. If you’re concerned that your company will struggle to absorb these costs, you need to seek help before they happen.

We have specialists on hand that can help you to facilitate turnaround strategies, sell your business, or close down your company depending on the best route available to you. Call us on 0800 975 0380, or email advice@forbesburton.com for a free consultation.