Robin Hood Squad Bags More Tax

HMRC Affluent Unit net 60% more tax

Figures obtained by law firm, Pinsent Masons, reveal that HMRC’s Affluent Unit relieved the rich of £137.2 million in extra tax in 2013/14 as a result of its activities. This marked a 60% increase on the previous year.

The Affluent Compliance team was established in 2011 with the purpose of investigating or risk reviewing those with a net worth of between £2.5 million – £20 million and recovering unpaid taxes. Just under a year later the starting limit of £2.5 million was lowered to £1 million. The unit now scrutinizes the affairs of those with an annual income of more than £150,000 and wealth of between £2.5 million – £20 million, plus those with wealth in the range of £1 million – £2.5 million.

In January 2013 the unit boasted 200 staff based in 17 teams in 6 locations across the UK. That same year HMRC added a further 100 inspectors to that number and announced that the Affluence Unit would be focusing on wealthy taxpayers that:

  • habitually use avoidance schemes to avoid paying Income Tax, Capital Gains Tax and Stamp Duty Land Tax etc;
  • have a poor compliance record – late filing of tax returns;
  • possess UK and/or offshore property portfolios; and
  • own Swiss assets that may have not been previously disclosed.

It is estimated that around 500,000 taxpayers fall under the spotlight of the Affluent Unit.

James Bullock, head of litigation and compliance at Pinsent Mason, commented, “This surge in extra revenue from Affluent Unit tax investigations serves as a reminder that HMRC is widening it lines of enquiry” and that “people who would just consider themselves moderately successful professionals and business people are now also coming under the scrutiny of HMRC’s specialist units.”

Since its £45 million investment in its ‘Connect’ database, HMRC are able to investigate individuals more easily as the computer system collects data on people from multiple sources, including banks, local councils and even social media.

Not everybody is impressed with the latest revenue figures however. Richard Murphy of Tax Research UK criticised by saying, “HMRC is supposed to collect £167 billion of income tax this year, of which at least a quarter will be from the top 1% of income earners.”

“In that case, to collect just £137 million as a result of investigations into this group when the official tax gap is £35 billion suggests that much less attention is given to them than any other group.”

He went on to say, “The investigation success rate is way below anything that could be expected given that we know tax avoidance is mainly undertaken by the wealthiest.”

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