Action Against Tax Evaders Must Be Stepped Up Instead

A report published today by HMRC into how it deals with wealthy individuals has been described as yet another example of the UK tax authorities clamping down on those individuals who are already paying tax.

According to tax experts at Irwin Mitchell, the report highlights that HMRC is continuing to focus on ‘soft’ targets. Specialists from the national law firm are concerned about this growing trend, and say that more time and effort should be spent on pursuing taxpayers who are evading paying any tax at all.

Entitled ‘How We Deal With Wealthy Individuals’, the new report states that HMRC defines wealthy individuals as those with a net worth of at least £20 million. It claims that there are 6,200 individuals in this category within the UK.

HMRC’s High Net Worth Unit (HNWU) was set up in 2009 to handle the tax affairs of the UK’s richest people. The unit has increased the revenue it’s brought in year-on-year to £268 million in 2013 to 2014 – a 20% increase on the previous year.

The report says that wealthy individuals collectively pay £3 to £4 billion a year in personal income and Capital Gains Tax and it adds that the unit has a number of specialist teams. These include a Finance division, which focuses on individuals connected to the finance sector, and a Rising Stars team, which deals with people who have rapidly increasing wealth and who are expected to meet the HNWU’s wealth criteria in the next few years.

The report says the HNWU has brought in more than £1 billion in additional revenue since it was formed and states that there has been an increase in wealthy individuals filing their tax returns on line and on time.

Phil Berwick, Tax Partner* at Irwin Mitchell, said:

*Non-lawyer