Regulation  

HMRC poised for further HNW tax crackdown

HMRC poised for further HNW tax crackdown

A crackdown on tax avoidance by HM Revenue & Customs is likely to be extended, according to law firm Pinsent Masons, after it netted the government an extra half a billion pounds.

HMRC collected an additional £494m-worth of income tax in 2014/2015 through investigations into tax avoidance schemes, according to a Freedom of Information request by the law firm.

Pinsent Masons’ tax director Paul Noble warned that advisers and accountants should beware of this success.

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He said: “High net-worth individuals and other wealthy taxpayers are likely to face further scrutiny as a result – both here and abroad.”

Since 2012, following media coverage of tax avoidance schemes by celebrities, HMRC stepped up its investigations into such activity, targeting actors, musicians, sports stars and comedians.

The Counter Avoidance Directorate was created in April 2014 with the primary objective of cracking down on the promotion and use of avoidance schemes.

Mr Noble said: “HMRC has been and continues to be granted huge new powers to help them close and clear the many thousands of open avoidance cases.”

In March, Pinsent Masons revealed HMRC had seen a surge in returns from investigations into the tax affairs of high net-worth individuals. Over the past year it returned a yield of £29 for every £1 spent on investigations into wealthy earners, up 60 per cent from the £18 yield per £1 spent in 2014.

However, a report from the Committee of Public Accounts concluded not enough was being done by HMRC to tackle tax fraud, stating “only limited progress” had been made.

Industry view

George Bull, senior tax partner at RSM, said that in the past year, despite resource constraints, HMRC had made significant progress in its continuing attack on tax evasion and abusive tax avoidance.

He added: “HMRC personnel, both in management and front-line tax inspectors, must therefore be disappointed at the sustained criticism they have received from Parliament’s Public Accounts Committee.”

peter.walker@ft.com