The National Whistleblower Center (NWC) has regularly detailed the need for financial incentives for whistleblowers, since coming forward can put careers, livelihoods and personal relationships at risk. NWC’s impact has been felt beyond the borders of the United States, both in its presence at international conferences and in the policies of other nations.
As previously reported, the United Kingdom’s HM Revenue and Customs (HMRC) seeks to emulate the United States’ whistleblower programs and its Strengthened Reward Scheme encourages people worldwide to help uncover major tax wrongdoing.
In an interview with NWC, Richard McConaughey, HMRC’s deputy director for intelligence and the Scheme’s lead, explained how the agency hopes to convert key information into tax recoveries and ultimately earn trust from the public, and thus, potential whistleblowers.
Targeting High-End Tax Fraud
In a dialogue with Kohn, Kohn & Colapinto LLP Associate Benjamin Calitri, McConaughey noted that compensating and rewarding whistleblowers is not new for HMRC. Its earlier reward system successfully generated intelligence about excise and commodity-related fraud, he explained. However, it was not attracting the information needed to tackle sophisticated, high-end tax wrongdoing.
The strengthened program targets that gap, focusing on wealthy individuals, corporate activity, offshore arrangements and avoidance-related tax risks. McConaughey described a minimum threshold of £1.5 million in tax at risk, intended to direct resources toward the most harmful cases.
Examples include concealed offshore wealth and profit manipulation. He cautioned that the facts determine whether particular conduct constitutes fraud. Whistleblower intelligence can help investigators locate money or understand arrangements that typical investigative tools might not reveal.
The program’s reach is international. Whistleblowers need not be UK citizens or reside in the country.
“We don’t mind where [the whistleblowers] are based,” McConaughey told Calitri. “What matters is the quality of intelligence that you’re providing us with to help protect the tax system.”
Confidentiality Starts With a Conversation
McConaughey encouraged prospective whistleblowers to contact HMRC even when they are uncertain whether their information qualifies. His team can evaluate the information and determine whether it fits the program’s objectives.
That initial conversation can take place anonymously. However, a whistleblower must eventually disclose their identity to HMRC to receive a reward. McConaughey confirmed that someone can begin anonymously and identify themselves later as the relationship develops.
“This Scheme relies on trust that people are going to share with us some really intrusive intelligence information,” McConaughey noted. “[They will] know that we are on hand to help and carefully debrief them, [and] so that we can understand quite quickly whether what they’re telling us makes the brief for HMRC.”
HMRC also separates source handling from enforcement. Whistleblowers remain in contact with the team responsible for managing their information, while investigators receive the intelligence needed to pursue the case. McConaughey said this structure limits the number of people who know a source’s identity.
“The duty of care is actually about its founding trust,” he added. “We are independently regulated. When someone reports human intelligence interaction to HMRC, there is a code of conduct that we need to follow religiously, to make sure that the identity and the protection of the individual is at the forefront of our minds.”
Rewards Must Reflect the Risks
One significant feature is the absence of an upper monetary cap on awards. McConaughey connected that decision directly to the potential consequences of reporting powerful tax offenders, including losing a job or experiencing lasting changes in personal circumstances.
“[We needed] to recognize that as a tax authority, the risk has to be balanced with a level of compensation,” McConaughey said. “And in that regard … we spoke to the U.S., and it was really clear that they were driving high end tax fraud reporting because the level of rewards were commensurate with the risks that people were taking. We have taken that strong lead from the U.S., and we think it’s the right move to make in this time.”
But Calitri also raised a central concern: awards are discretionary, with no right to appeal an award denial.
McConaughey responded that denying rewards for valuable intelligence would undermine HMRC’s own interests. He also said the agency has a responsibility to tell informants promptly when their information does not meet its standards. Those assurances are important, but they do not eliminate the uncertainty inherent in discretionary awards.
Who Can Contribute?
The interview also explored reporting arrangements beyond a single insider’s disclosure.
McConaughey encouraged people with shared information to organize and approach HMRC together. A whistleblower who later submits identical information is unlikely to receive a reward, he said. However, a subsequent source who provides different information or adds demonstrable value could receive consideration.
Outside analysts may also have a role. When asked about people who develop intelligence through expertise and publicly available information, McConaughey declined to promise eligibility categorically. Instead, he emphasized the importance of the connection between information received, action taken, and tax ultimately collected.
Success Beyond Recoveries and Strategies for Prevention
McConaughey did not predict when the program would collect its first billion or how much it would ultimately recover. However, he did mention HMRC’s eagerness to make the first reward payment to build confidence in the scheme.
His broader ambition extends to the overall deterrence effect.
The increased risk of being exposed for tax fraud could ultimately prevent tax fraud from occurring in the first place. Preventing those losses, McConaughey said, would be “as much of a success as is paying out a reward.”
