THE HIGH TAX take from HM Revenue & Customs’ high net worth unit could have been artificially inflated, a tax expert has warned.
The unit, which investigates the tax affairs of the UK’s 5,000 richest people, brought in £162m in 2010-11, up from £82m the year before, The Sunday Times reported. This was on top of the tax already paid by the individuals involved.
Exchequer secretary to the Treasury David Gauke (pictured) said: “The tax affairs of the very rich are inevitably complicated but, by working closely and co-operatively with accountants and tax agents, HMRC’s high net worth team is ensuring that technical complexity does not stand in the way of accuracy so that the very rich pay the tax the law says they should.”
Mike Warburton, tax director at Grant Thornton, said that these figures were partly due to the extra resources put into the high net worth team, which is one of its most rewarding areas.
However, he also said that the figure could be artificially high due to people wanting to avoid the 50% top rate of tax. “When there was the 50% announcement, a lot of clients brought income forward to 2009-10, which increased the tax yield. Many of them will not take dividends until the tax rate falls again.”
A similar thing happened when the government announced the end of taper relief, which encouraged people to bring forward capital gains in 2008-09. This resulted in an income of £7.8bn in CGT that year, up from £3.8bn two years previous and a fall to £2.5bn the following year.
Crowe Clark Whitehill , the top 20 accountancy firm, has announced the promotion of Chris Mould to partner
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said
UK-based non-doms have paid ten times more tax than the average taxpayer, raising concerns over the Brexit impact on non-dom contributions and therefore, the economy