UK revenue takes £700 million more from high net worth taxpayers

Heightened scrutiny of high net worth individuals saw the amount of tax raised from investigations by HM Revenue & Customs rise to a record £1.9 billion in 2018/19, up 58% from the £1.2 billion levied the year before.

The dramatic rise is attributed the increase in global data sharing agreements. The OECD’s common reporting standard (CRS) means that over 100 countries now share data with the UK. In 2018, HMRC received information about 5.67 million offshore accounts held by around three million UK residents.

Data leaks have also increased the information available to HMRC. Data from the ‘Panama Papers’ alone has brought in £190 million so far, with a further 215 investigations still ongoing.

“The surge in yield from investigations may also reflect HMRC’s multi-faceted approach to compliance amongst wealthy individuals,” said Steven Porter, a tax law expert at law firm Pinsent Masons. “Data is used to cross-check returns and sometimes letters are simultaneously pumped out asking individuals to confirm information they don’t need to confirm – mistakes can easily be made which can leave taxpayers exposed to investigations.”

HMRC’s ‘Connect’ database is also helping in its efforts to gather information from an increasingly wide range of sources. It is able to cross reference up to 22 billion lines of data; including tax returns, property and financial data.

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