HM Revenue & Customs has seen a surge in returns from investigations into the tax affairs of high net worth individuals, according to figures from Pinsent Masons.
The international law firm found that over the past year, HMRC has returned a yield of £29 for every £1 spent on investigations into wealthy earners.
This is a 60 per cent increase, up from the £18 yield per £1 spent in 2014.
The high net worth unit, which covers 6,000 individuals with a net worth of £20m or more, has collect a total of £414m in extra revenue over 2014/15, up from £268m in the previous year.
Pinsent Masons suggested the increase in yield may have been driven in part by the liberal use of HMRC’s new powers to demand disputed tax upfront, including accelerated payment notices (APNs), which challenge the suspected use of tax avoidance schemes. .
Fiona Fernie, partner and head of tax investigations at the law firm, said HMRC has managed to achieve “healthy results” across the board this year, and predicted the tax office will want to build on this success and ratchet up return on investment even further going forward.
“The improvement in the Republic of Ireland is particularly marked for investigations into high net worth individuals,” she said.
Ms Fernie also pointed out the Revenue now has a range of tools at its disposal - including its sophisticated database system Connect - designed to identify targets for investigation and collect extra revenue.
“The Revenue and the Treasury will want to focus on the most lucrative areas, so the expectation is that money will continue to be poured into this area to drive up its effectiveness and efficiency.”
katherine.denham@ft.com
