National Audit Office reveals scale of HMRC team - and slow progress
Nearly two billion pounds in taxes thought to be owed by the super-rich is being investigated by a crack team of government revenue officers, with more than half this money linked to aggressive tax avoidance schemes.
The National Audit Office (NAO) reports the specialist team of HMRC tax collectors – which is also probing 40 names from the Panama Papers – looked into around 6,500 people each worth over £20 million last year, with an average of four tax issues for each person.
A possible £1.9 billion in unpaid taxes dating back years is being investigated with around £1.1 billion linked to tax avoidance schemes, and 15 per cent of the wealthiest having used at least one.
But progress has been slow, with 4,000 inquiries open for more than three years.
HMRC has looked into and closed 72 cases of tax fraud by high net worth people over the last five years, with only two criminal investigations and one conviction.
Prime Minister Theresa May has vowed to tackle big companies and rich individuals paying less than their fair share of taxes, while the Labour Party has said these missing tax billions should be spent on public services.
HMRC’s crack team, which is also looking at 40 people named in the Panama Papers, gives a ‘customer relationship manager’ to those being probed to catch tax dodging. It raised an extra £416 million beyond tax declared by the rich in 2015/16.
Labour MP Meg Hillier, who chairs the Public Accounts Committee, said:
“For the ordinary taxpayer, HMRC’s use of ‘customer relationship managers’ will sound rather a cosy way for HMRC to engage with the richest people in the country; people worth over £20 million each.
However, 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 £1.9 billion of tax that is potentially at risk.”
The NAO report found the super-rich, who are 0.02 per cent of taxpayers, paid more than £4.3 billion in tax in 2014/15.
It also said 137 of the country’s richest agreed to pay a million pounds each in 2009 as part of a settlement over undisclosed assets in tax haven Liechtenstein, after admitting liabilities of £141 million in return for softer penalties.
An HMRC spokesman said:
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“Everyone must pay the tax that is due and we do not accept less.
HMRC enforces the rules impartially and last year we tracked down an additional £416 million in tax from the wealthiest, which would have otherwise gone unpaid.
We will continue to evaluate our results so that we carry on getting what is due to the country.”