Informants were rewarded £1.4m after submitting a record number of tip-offs to the taxman, figures revealed.
The number of individuals reporting friends, neighbours, colleagues and businesses for not paying enough tax increased to 170,992 in the 2025-26 tax year, according to government data.
The rise comes after Labour incentivised snitching with a strengthened reward scheme designed to emulate a US-style system at the last Budget. Previously, there had been only limited payouts. Since April, informants received between 15pc and 30pc of the value of the extra tax collected by HMRC when they provided information which directly led to more than £1.5m being recouped.
In the previous tax year, whistleblowers received £852,438.
Hinesh Shah, of law firm Pinsent Masons, said: “We’re expecting that the number and quality of whistleblower reports to HMRC will increase dramatically under the new reward systems – which is based on the US system.
“In the US, $123.5m was given to tax whistleblowers as rewards in the most recent year for which data is available.
“If HMRC starts issuing individual awards that go into the millions of pounds then that is going to lead to a radical change in behaviour,” he added.
Tim Stovold, of Moore Kingston Smith, said the £1.4m payment could grow ten-fold if HMRC “put the same energy into the UK scheme as the Americans have”.
