HM Revenue & Customs (HMRC) is ramping up its crackdown on unpaid taxes, with thousands of new investigations launched targeting individuals and households. Reports indicate that the government’s tax authority secured or safeguarded approximately £10 billion during the last financial year, demonstrating increased enforcement activity under the Labour government.
A key factor behind this surge is HMRC’s advanced data analysis system, Connect, which cross-references data from banks, social media, online marketplaces, and tax returns. Law firm Pinsent Masons reported that Connect triggered 540,000 investigations alone during the 2024/25 tax year.
Ian Robotham, partner at Pinsent Masons, explained: “The algorithms used by HMRC allow the detection of anomalies that might otherwise remain unnoticed by human auditors.”
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Meanwhile, Ian Dickinson, tax director at UHY Hacker Young, warned: “HMRC appears increasingly willing to prosecute individuals who attempt to evade taxes.”
Statistics from HMRC’s Fraud Investigation Service further underscore this trend, with 260 convictions secured during the 2025 to 2026 period for serious tax evasion offences.
In addition to data-driven investigations, HMRC is actively expanding its network of informants through an enhanced whistleblower reward scheme. Informants can receive between 15% and 30% of recovered tax exceeding £1.5 million, with total payments to whistleblowers reaching £1.4 million after a record number of tip-offs in the past financial year.
Hinesh Shah of Pinsent Masons commented on the scheme’s potential impact: “With the introduction of a reward system inspired by the US model, we anticipate a dramatic increase in both the number and quality of whistleblower reports to HMRC.
“For reference, the US paid out $123.5 million in whistleblower rewards in the most recent available year. Should HMRC begin issuing awards in the millions, it could significantly change taxpayer behaviour nationwide.”