TaxPersonal TaxHMRC in £121m foreign bankers investigations yield

HMRC in £121m foreign bankers investigations yield

Tax take from expat bankers and hedge fund managers rises

HMRC in £121m foreign bankers investigations yield

INVESTIGATIONS into highly paid foreign City workers living in the UK have yielded record revenues, according to data obtained by law firm Pinsent Masons.

The operations generated around £121m in 2012/13, up from £117m despite the fact that the squeeze on investment banking profits meant that City bonuses declined dramatically, down from an estimated £4.4 billion during the 2011 ‘bonus season’ to £1.6 billion for bonuses paid out during the 2012/13 bonus round.

Some features of expat packages have particularly caught the eye of HMRC. For example, the use of dual contracts, which assign an element of an individual’s income to a contract for work done overseas, were outlawed in the Autumn Statement.

Complicated tax affairs and lack of familiarity with the UK rules can mean that expats make more mistakes with their tax returns, making them a lucrative target for HMRC.

Pinsent Masons partner Ray McCann said: “With ambitious targets to meet in terms of bringing in more revenue, it is no surprise HMRC continues to see what is a highly paid but relatively small group of individuals as offering maximum rewards in terms of tax take for much less effort.”

“Most of these foreign employees work for the biggest investment banks and hedge funds. They are internationally mobile and tend to be at the upper scale of pay rates, often benefiting from more than usually sophisticated bonus arrangements and complex employment agreements.”

Related Articles

HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

1w Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

4m Emma Smith, Managing Editor
Rangers tax case to have ‘dramatic’ consequences for football and business

Legal Rangers tax case to have ‘dramatic’ consequences for football and business

4m Emma Smith, Managing Editor
Finance Bill 2017: Corporate tax reporting requirements 'a burden'

Business Regulation Finance Bill 2017: Corporate tax reporting requirements 'a burden'

11m Stephanie Wix, Writer
PAC raises “serious concerns” about HMRC’s digital plans

Corporate Tax PAC raises “serious concerns” about HMRC’s digital plans

11m Stephanie Wix, Writer
HMRC collects record £5bn in inheritance tax

HMRC HMRC collects record £5bn in inheritance tax

4m Emma Smith, Managing Editor
The top three issues that the next government must address for accountants

Making Tax Digital The top three issues that the next government must address for accountants

4m Emma Smith, Managing Editor
HMRC cuts over 150 offices to reduce running costs

Corporate Tax HMRC cuts over 150 offices to reduce running costs

9m Stephanie Wix, Writer