HMRC HAS NETTED 60% more tax from a group it has dubbed the “mass affluent”, according to figures obtained by law firm, Pinsent Masons.
The taxman’s ‘affluent unit’ – set up in 2011 to target those not rich enough to fall under its ‘high net worth unit’ but who earn over £150,000 – collected £137.2m in extra tax from its probes in 2013/14, up from £85.7m the previous year.
With some 500,000 UK taxpayers estimated to fall into this grouping, Pinsent Masons says the affluent unit doubled in size in 2013, after recruiting 100 extra inspectors while its remit widened to cover those with private wealth of more than £1m, down from the previous £2.5m threshold.
James Bullock, head of litigation and compliance at Pinsent Masons, said: “This surge in extra revenue from affluent unit tax investigations serves as a reminder that HMRC is widening its lines of inquiry. It is no longer focussing solely on the super-rich. People who would just consider themselves moderately successful professionals and businesspeople are now also coming under the scrutiny of HMRC’s specialist units.”
HMRC has also harnessed technology in its bid to snare those not paying tax having splurged £45m on its ‘Connect’ database, which gathers real time information to help it identify groups where tax avoidance may be an issue. It mines and captures data from multiple public and private sources, including banks, local councils and social media.
But Richard Murphy, of Tax Research UK, poured scorn on the figures, suggesting that even if they were correct they were “woefully low”. HMRC are “hopelessly understaffed” and collecting £137m when the tax gap is £35bn is simply not good enough, he said.
“HMRC is very bad indeed at investigating the affairs of the affluent even though it is well known that this is a group particularly prone to tax avoidance and who have been targeted for this reason on a number of occasions,” he said, adding that “any government serious about cutting the deficit needs to put more resource into tax collection.”
Later this year, the Direct Recovery of Debt plans are set to go live, meaning HMRC can take outstanding tax directly from people’s bank accounts.
However, after widespread opposition from the accounting, banking and charity sectors, a concession was agreed, whereby tax inspectors are now compelled to hold a face-to-face meeting with individuals before any funds are removed.
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year
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
Since the release of HMRC’s plans for digital tax reforms, many have agreed with the call for a delay