HMRC windfall from crackdown on wealthy

Household money

Updated on 27 January 2015 | 8 Comments

Homing in on tax avoidance and evasion by the “mass affluent” was successful.

A Government crackdown on tax evasion and avoidance by the wealthy raised 60% more money in 2014.

HMRC’s Affluent Unit, which covers 500,000 UK residents on annual incomes over £150,000 or who have wealth of over £1 million, raised £137.2 million in tax. That’s up from £85.7 million in 2013, according to law firm Pinsent Masons

The Affluent Unit was set up in 2011 and doubled in size last year to cope with an increased workload.

The taxman uses its Connect computer system to investigate potential tax criminals by collecting their data from multiple sources including banks, local councils and social media.

Further to go

However, statistics from Tax Research show that there is a tax gap of £35 billion between what is collected and what is owed, with at least a quarter coming from the top 1% of earners. To help close the gap, the Government’s tax-collecting target for the end of this year is a significantly larger £586 million.

As announced in Budget 2014, HMRC will soon have the power to recover tax and tax credit debts directly from the bank and building society accounts, including ISAs, of debtors. However, tax inspectors need have a face-to-face meeting with taxpayers before funds can be recovered.

The Direct Recovery of Debt (DRD) plans will be introduced later this year. For more read Plans for HMRC bank account raids revised.

Compare current accounts with lovemoney.com

More on tax:

HMRC to send out self-assessment reminder emails

Taxpayers to pay £165 each in ‘unnecessary’ tax this year

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