The Public Accounts Committee (PAC) says the government must take tougher stance on taxing the very wealthy, saying that HM Revenue & Customs (HMRC) is failing to properly pursue Britain’s wealthiest people, potentially undermining confidence in the whole system.
The PAC report*, issued this week, sets out measures to enable HMRC to improve tax collection, and urges the Revenue to be more transparent about its work, seek new powers where required and do more to tackle those involved in tax avoidance and evasion.
Since 2009, HMRC has operated a specialist unit dealing with so-called high net worth individuals, those with a wealth of more than £20 million and who are each assigned a ‘customer relationship manager’ to administer their tax affairs. Yet the amount of income tax they paid has fallen by 20 per cent, from £4.5 billion in 2009-10 to £3.5 billion in 2014-15. This was despite income tax receipts from the public as a whole rising by £23 billion over the same period.
The committee also claims that HMRC has a “dismal record” when it comes to prosecuting the very wealthy for tax fraud in the criminal courts. In the five years to 31 March 2016, it completed just 72 fraud investigations into such individuals, with all but two having been dealt with using its civil powers.
The committee highlighted particular concern about tax evasion in the football industry and the fact that image rights in sports and entertainment are “being exploited”. It revealed that 43 football players, 12 clubs and eight agents were currently the subject of “open inquiries” by HMRC.
Commenting in the report, Meg Hillier MP, Chair of the PAC, says: “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….We will expect HMRC to respond positively to the full recommendations set out in our report.”
Beavis Morgan – Advisers to Britain’s high net worth individuals
Our specialist team at Beavis Morgan offers over 40 years’ experience in helping high net worth individuals maintain their capital value and manage their income levels, to assist in continuing to meet your lifestyle goals. We proactively explore the intricacies of the tax legislation, making sure that all reliefs available to you are utilised and that your interests are safeguarded. We can also assist you with medium and longer-term financial planning to ensure that you, your family, and ultimately future generations of your family, will benefit from your wealth in accordance with your wishes.
We also provide full range of business and tax advisory services, including image rights planning, to the sports sector – sports clubs, individuals, service and management companies, event organisers, governing bodies and a range of other sporting organisations.
In turn, if you are concerned about a tax enquiry into your affairs, worried that you may have possibly under-declared or, worse still, are you already under enquiry, our tax specialists, some of whom are former HMRC Inspector of Taxes, are well versed in dealing with all types of tax issues. We are also readily available to oversee HMRC disputes on your behalf, as well as to represent clients in appeal proceedings before the Tax Tribunal. In some situations we can also offer professional fee protection insurance, so the costs are covered in whole or in part.
For more information and to discuss your tax affairs in further detail, please contact Alan Ford or you usual Beavis Morgan Partner.
* Read the full report: Collecting tax from high net worth individuals