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HMRC sees high ROI from investigations into UK’s wealthiest

HMRC’s High Net Worth Unit has seen a considerable increase in its ROI over the past year, with the investigation group yielding £29 for every £1 invested.

The figure is up from £18 per £1 spent in 2013 to 2014, with the taxman continuing its clampdown on tax avoidance.

Established in 2009, the 400-strong investigations unit covers the UK’s 6000 wealthiest individuals (those earning £20m or more). Last year the group collected £414m in extra revenue, up from £268m the previous year.

Many within the tax profession believe that HMRC’s Accelerated Payment Notices (APNs) are behind the increase in revenue at the investigation unit.

The highly contentious notices, which were first introduced in 2014, enable the taxman to demand disputed tax upfront if they suspect any use of a tax avoidance scheme.

Law firm Pinsent Masons highlights that other returns from government investigations were also strong, especially tax inquiries into large businesses, which yielded £73 per £1 spent.

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The Large Business Directorate manages the tax compliance of the UK’s 2,100 largest firms. Between 2013 and 2014 its investigations yielded £97 per £1 invested.

Fiona Fernie, partner and Head of tax investigations at Pinsent Masons comments: “HMRC has managed to achieve healthy results across the board this year. We predict they’ll want to build on this success and ratchet up return on investment even further going forward.”

“The improvement in ROI is particularly marked for investigations into High Net Worth individuals. HMRC now has a whole host of tools at its disposal when it comes to identifying targets for investigation and collecting extra revenue from this group, including its sophisticated database system Connect.

“The revenue and the treasury will want to focus on the most lucrative areas, so the expectation is that money will continue to be poured into this area to drive up its effectiveness and efficiency,” continued Fernie.


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