Figures show that investigations into wealthy taxpayers, defined as those with incomes over £200,000 or assets above £2m, yielded more than they did in the previous year in the year to 5 April 2024.
The overall amount collected across HMRC from wealthy taxpayers increased to £5.2bn in the 2023-24 tax year – up from £4bn in the 2022-23 tax year.
Ian Robotham, legal director for tax disputes and investigations at law firm Pinsent Masons – which pointed out the rise – said HMRC has to hit tough targets for collecting extra tax.
“It is hard to see how they can achieve those targets without a sharp rise into tax investigations into the wealthy,” he added.
AI helps close the gap
Robotham said the tax collector is increasingly using AI tools and ‘big data’ techniques, such as its flagship Connect Computer System (CCS), to help with tax collection as it tries to close the ‘tax gap’, which is the gap between the tax due and what is actually collected.
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The CCS cross-references businesses’ and people’s tax records with other databases to establish fraudulent or undisclosed activity. OECD initiatives are also helping, he added, with the Common Reporting Standard and Global Forum ensuring HMRC is automatically notified when UK taxpayers move assets to jurisdictions party to the agreements.
He said wealthy taxpayers should consider seeking tax advice if they know they have tax issues.
He said: “The scale of specialist investigations into wealthy taxpayers shows HMRC has already been clamping down much harder on those suspected of underpaying tax.
“Wealthy taxpayers who know they have tax issues to settle should urgently seek professional advice. Penalties in respect of inaccuracies can be mitigated down where taxpayers are proactive in contacting them to tell them about and assist them in resolving inaccuracies.”
