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The number of reports of alleged tax fraud to HM Revenue and Customs (HMRC) surged to a record high in 2024/25 but payouts to informants fell for the first time in four years, according to data obtained by Price Bailey.
HMRC received 164,670 anonymous tip offs via its fraud hotline channels in 2024/25, a record high, and a 9% increase on 2023/24, when 151,763 reports were received.
However, the amount paid out by HMRC to people who provided actionable intelligence on tax fraud fell by 13%, from just under £1m in 2023/24 (£978,256) to £852,438 in 2024/25.
According to Price Bailey, the data suggests that HMRC is being “inundated” with more low-value or unverifiable tip-offs, whilst getting even fewer valuable tip-offs that would merit discretionary payments. As awareness grows and reporting becomes easier, HMRC is having to contend with “growing numbers of speculative, exaggerated, or malicious claims”.
In the most recent tax year (2024/25), HMRC estimates that tax fraud cost the UK £5.5bn, with the figure reflecting a continuing upward trend in recent years.
Earlier in the year, HMRC outlined plans for a new whistleblowing regime now expected by the year end in which informants may receive a percentage of tax recovered, rather than the current discretionary, modest payments. This would be closer to the Internal Revenue Service (IRS) model in the US. Further details on HMRC’s new fraud reporting scheme are not expected until on or just before its launch.
Andrew Park, Tax Investigations partner at Price Bailey, said: “HMRC received a record number of tip offs yet total payouts to whistleblowers fell by 13%. While HMRC depends increasingly on taxpayer intelligence to close the £5.5 billion tax fraud gap, the current reward system lacks both scale and clarity.
“If HMRC wants informants to deliver high-value intelligence, it must rethink how it rewards risk and insight. A transparent, percentage-based system – like the one used by the IRS – would offer real incentives for exposing major fraud. The new whistleblowing regime could be a game-changer, but it must balance the right incentives with selectivity to avoid flooding the system with more noise.”
