Taxpayers have been warned HM Revenue & Customs does not always "join the dots correctly" when investigating tax avoidance, as it emerges the taxman has collected more than £600m through tax probes in the past three years.
According to a freedom of information request submitted by accountancy firm Saffery Champness, HMRC fraud and avoidance investigations yielded £610,292,968 for the Treasury in the financial years 2016/17 – 2018/19.
COP8 investigations, used by HMRC for complex cases where a taxpayer may have used an avoidance scheme or device to reduce tax liability, accounted for 43 per cent of the figure recovered in that period and COP9 cases, the civil route used by the taxman in response to to tax fraud, accounted for 57 per cent.
The FOI request found 1473 COP9 and 924 COP8 investigations were opened in the period of three financial years.
Zena Hanks, partner in the private wealth team at Saffery Champness, said the accountancy firm had seen HMRC take an "increasingly hard line" on suspected avoidance in recent years.
She said: "The kinds of avoidance schemes that many people imagine have long been consigned to the history books are still under HMRC scrutiny – we have never recommended them and taxpayers don’t want to use them.
"The vast majority of taxpayers just want to get things right.
“However, HMRC’s pool of intelligence is growing as are the legal tools at its disposal – with the Connect System and the Common Reporting Standard the taxman knows far more than ever before.
"HMRC therefore feels ever more empowered to target taxpayers where they think fraud may have been committed."
But Ms Hanks warned despite the growing tools at its disposal the taxman does make mistakes when pursuing suspected tax avoidance and fraud.
She said: "We should also be mindful that HMRC do not always join the dots correctly and enquiries can be opened with incorrect information.
"In these circumstances swift action should be taken to close down any such enquiry and to protect the taxpayer from unnecessary angst."
An HMRC spokesperson said: "HMRC is successful in more than 90 per cent of cases it brings to trial and last year secured more than 800 criminal convictions for tax and duty fraud, resulting in almost 650 years' jail time.
"That is alongside more than 1,000 people being charged, while collecting and protecting £5.4bn for vital public services."
rachel.mortimer@ft.com
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