More people with higher incomes and substantial assets could be facing tax investigations following an increase in the tax team that focuses on their affairs.
HM Revenue and Customs (HMRC) announced on 16 January that its affluent compliance team is to recruit 100 extra inspectors. The team currently has 200 staff based in 17 teams in six locations across the UK
The team has been focusing on taxpayers with an annual income of more than £150,000 and wealth of between £2.5 million and £20 million, around 300,000 people in total, and has already brought in £75 million in additional tax. The enlarged team will also cover people with wealth in the range of £1 million to £2.5 million.
The team is separate from The Affluence Unit is separate from HMRC’s high net worth unit, which focuses on taxpayers with wealth of more than £20 million but both share a remit on challenging suspected tax avoidance and tax evasion, increasing the likelihood of tax investigations.
Exchequer Secretary David Gauke said: “The vast majority of people pay their way. Dodging tax is immoral, illegal and unaffordable and the minority who cheat are increasingly finding that, thanks to the work of the affluent team, they have made a big mistake.”
Roger Atkinson, director of HMRC’s affluent teams, said: “The new team will be fully operational by April and focused on delivering an additional £75 million a year. This is very good news for all honest taxpayers.” Common characteristics of the wealthy people targeted by the affluent compliance team include a low effective rate of tax across their total income, failure to file self assessment tax returns on time and having UK and offshore property portfolios.
The recruitment of 100 extra inspectors is another example of the government and HMRC’s continuing drive to close the tax gap – the amount of tax that should be collected compared with the amount that is actually brought in.
As a result tax investigations may become more frequent. In the event of a tax investigation, working with the experts at Taxation-Investigation can help to clarify the taxpayer’s position, identify their options and help to mitigate the outcome where there are issues to be resolved.