Britain’s tax authority has doubled its revenue from wealthy individuals, its latest records show.
Specialist investigators at HMRC netted more than £1.5 billion in 2023-24, according to data released in response to a Freedom of Information (FOI) request by law firm Pinsent Masons.
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HMRC’s Wealthy and Mid-Sized Business Compliance (WMBC) team experienced a bumper year thanks to a £652 million settlement with ex-F1 magnate Bernie Ecclestone.
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Even without Ecclestone’s hefty contribution, the WMBC, which targets those earning more than £200,000 a year, or with assets of more than £2 million, recorded an uplift of £135 million in tax collected in 2023-24, compared to the previous year.
‘Sharp rise’ in tax investigations
‘HMRC have been set some very hard targets for extra tax collection by the Chancellor,’ said Ian Robotham, legal director at Pinsent Masons. ‘It is hard to see how they can achieve those targets without a sharp rise in to tax investigations into the wealthy.’
The latest figures from the National Audit Office show wealthy individuals paid £119 billion in personal taxes in 2023-24 – amounting to 25 per cent of the UK’s personal tax receipts and an average of £140,000 per person.
According to Robotham, the tax authority has increased its tax revenue thanks to investment in AI and ‘big data’ tools, including its Connect software. The system is believed to collate information ranging from credit card activity to travel history, which it cross-references with individuals’ business and personal tax records.
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‘People do still underestimate the sophisticated data mining that HMRC does,’ Dawn Register, tax dispute resolution partner at accountancy firm BDO, told the FT.
‘Most inquiries are data-led, they’re not random. HMRC is often checking for technical errors and the wealthier the individual they find an error for, the more tax yield they’re going to get.’
Tax officials are increasingly probing offshore assets and tax residency status, Register added.
HMRC said: ‘It’s our duty to ensure everyone pays the right tax under the law, regardless of wealth or status.
‘The government is delivering the most ambitious ever package to close the tax gap and bring in an extra £7.5 billion for public services per year by 2029-30.’
