Collecting tax from high net worth individuals Contents


HM Revenue & Customs (HMRC) needs to be tough, and be seen to be tough, on tax avoidance and evasion, to ensure that everyone, particularly the very wealthy, pays their fair share of tax. In 2009, HMRC set up a unit to focus on the tax affairs of ‘high net worth individuals’, who are the wealthiest people in the UK. These individuals employ professional tax advisers to calculate the tax they will pay. It is alarming that HMRC has around one third of these individuals under enquiry at any one time, and in 2015–16 was investigating cases with a value of around £1.9 billion extra tax revenue that might be due. The amount of tax paid by this very wealthy group of individuals has actually fallen by £1 billion since the unit was set up. HMRC provides a customer relationship manager to each high net worth individual (which is help that other taxpayers do not get) but there is not enough clarity about what they can and cannot do, and meetings and phone calls with these taxpayers are not recorded. HMRC is hampered by not having the power to demand more information about what assets high net worth individuals hold, and by the way certain tax rules have been set and interpreted, such as the complex rules on image rights. By being more transparent about its work, seeking new powers where necessary, and delivering on its plans to get tougher with those who break the rules, HMRC could collect more cash and must do more to give the public greater confidence that there is not one set of rules for the rich and another for everyone else.

24 January 2017