HMRC is chasing almost £2bn that is potentially owed in taxes by the UK’s richest people, according to the public spending watchdog.
The National Audit Office said HMRC’s specialist unit recovered £416m in 2015 from 6,500 “high net worth individuals” with wealth of more than £20m.
But efforts are ongoing to recover an estimated £1.9bn, the NAO said.
Each one of the group of 6,500 is assigned their own HMRC official to liaise with over their tax bill.
The £416m is in addition to tax the wealthy individuals voluntarily declare, which totalled more than £4.3bn in 2014-15.
They often have complex tax affairs involving different countries.
The £1.9bn figure of tax that is “at risk” of not being received, is an estimate and not all of it will be owed once each case has been examined in detail, the NAO said.
‘Better understanding’
It covers some cases that have been open for many years, and £1.1bn of it relates to tax avoidance schemes that are marketed at wealthy investors.
As part of efforts to maximise the tax recovered, each one of the high net worth individuals is assigned a “customer relationship manager” by HMRC, who is responsible for “building an understanding of each taxpayer’s affairs and behaviours” and to liaise with their tax agent on the amount they owe.
The officials can open a formal inquiry into a case, which can take years to resolve.
According to the NAO, HMRC is criminally investigating 10 high net worth individuals in relation to illegal offshore tax evasion, although just one has been prosecuted since 2010.
It is aiming to increase the number of prosecutions to 100 by 2020.
The specialist unit recovers £29 for every £1 spent on staffing costs, the NAO said.
The watchdog’s head, Amyas Morse, said the unit gave HMRC “a better understanding of the tax affairs and behaviours” of the wealthiest people.
But the report questioned why HMRC had not looked at “what works and why” in its current approach, saying this could make it more effective.
Panama Papers
Labour MP Meg Hillier MP, chairwoman of the Commons Public Accounts Committee, said the “customer relationship managers” might sound like “rather a cosy way for HMRC to engage with the richest people in the country”.
But she added: “I am pleased to see HMRC is beginning to link these individuals to the businesses and trusts they are also involved in, to help tackle the £1.9bn of tax that is potentially at risk.”
HMRC is also investigating the huge leak of records from law firm Mossack Fonseca, known as the Panama Papers, which revealed how the rich and powerful use tax havens to hide their wealth.
According to the NAO report, tax officials have identified 40 of the wealthiest group in the leaked data and are deciding whether their files warrant further investigation.
The report also found that 137 of the country’s richest who had undisclosed assets in Liechtenstein used an agreement with the tax haven in 2009 to admit their liabilities in return for less harsh penalties, with an average settlement of £1m per person.
(bbcnews)
