Tax avoidance: HMRC criticised for not targeting wealthiest

Taxman slated for not getting tough on super-rich - while increasing focus on middle class.

MPs have slated HMRC for appearing to give Britain’s super-rich an easy ride.

The Public Accounts Committee (PAC) said the taxman’s strategy “suggests the very wealthy get help that others do not” in a scathing report published today (Friday, January 27).

It pointed out that Income Tax receipts from high net worth individuals – those worth more than £20 million – had actually fallen £1 billion since 2009 while the total paid by everyone had increased £23 billion.

Labour MP Meg Hillier, chair of the PAC, added: “HMRC's claims about the success of its strategy to deal with the very wealthy just don't stack up.”

HMRC must do more to give the public greater confidence that there is not one set of rules for the rich & another for everyone else https://t.co/B0QSKpYLWi
— MegHillierMP (@Meg_HillierMP) January 27, 2017

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Greater focus on the middle?

It comes just a day after we reported how the taxman had increased the number of tax employees targeting middle-class earners.

There are now 395 staff working in the ‘Affluent Unit’, almost double what it was four years ago.

The Affluent Unit investigates people earning more than £150,000 or a net worth of at least £1 million.

Many ordinary people will fall into the category due to soaring house prices meaning their property wealth is over £1 million.

HMRC has defended the ballooning size of the Affluent Unit by saying people who fall into this category are more likely to make mistakes as their tax affairs are more ‘complex’.

“Affluent individuals represent a greater tax risk than the rest of the population because they are more likely to have more complex tax affairs.

“It makes sense for HMRC to provide closer scrutiny of their affairs,” says an HMRC spokesperson.

Time to target the wealthiest?

Perhaps unsurprisingly, the PAC has called on the taxman to ensure that “everyone, particularly the very wealthy, pays their fair share of tax”.

Hillier , the PAC chair, added: “If the public are to have faith in the tax system then it must be seen to have fairness at its heart. It also needs to work properly.

“In our view HMRC is failing on both counts.

“HMRC must play a stronger role in identifying tax measures which are not being used as Parliament intended and push harder for reform where the rules are open to abuse.

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