HMRC ramps up high-net-worth tax avoidance clampdown
HMRC has increased its scrutiny of potential tax avoidance among high-net-worth individuals following the launch of a specialist team, says law firm Pinsent Masons.
The ‘Rising Stars’ team in HMRC, which focuses on high-net-worth individuals with growing assets, increased the number of investigations it carried out and the amount recouped in extra tax. Last year the team carried out 51 investigations, compared to 38 the year before. Those investigations led to £6.6m of extra tax collected in 2013-14, compared to £4.9m in 2012-13, says Pinsent Masons.
“HMRC has been clamping down on suspected tax avoidance amongst very wealthy taxpayers for some time and it now has a system in place to monitor those with fast-growing wealth well before they reach necessary threshold for scrutiny by the HNW unit,” says Fiona Fernie, partner and head of tax investigations at Pinsent Masons.
The specialist team at HMRC looks at individuals with a net worth of more than £15m who are likely to have £20m in assets in the next five years. The scrutiny is likely to focus on entreprenuers, sports stars, and those at investment banks, says the law firm.
The use of technology has also aided HMRC in finding potential tax avoiders, using data from banks, councils and social media to identify candidates.
“Connections between those involved with tax avoidance are now more easily detected. Taxpayers linked to a particular firm or business may be targeted – if one hedge fund manager or employee is found to be worthy of investigation, for example, enquiries into his or her colleagues are likely to follow,” says Fernie.
