HM Revenue & Customs (HMRC) high net worth unit has come under scrutiny as to whether or not it’s doing a good job.
The House of Commons’ Public Accounts Committee (PAC) has led the way in criticising HMRC, stating that it needs to be more transparent about the work it does to show that high net worth individuals pay what they owe. A report, Collecting Tax from High Net Worth Individuals, led MPs to believe that HMRC’s approach should be tougher.
The unit was established in 2009 for the collection of tax from the country’s richest – those with a net worth of more than £20 million (although in 2016 the threshold was reduced to £10 million). In 2015/16, HMRC considered there to be about 6,500 such individuals and the unit subsequently raised £416 million as a result of its actions, according to a report by the National Audit Office. Chief executive and permanent secretary, Jon Thompson, said that the unit had been a success, and outlined the contribution it had made in the battle against tax avoidance.
The unit allocates a customer relationships manager to each taxpayer with the aim of resolving issues before they submit their tax return. These managers do not provide advice, although they are able to discuss specific ideas with a view to building a co-operative relationship. The idea behind this system, according to HMRC is not to offer high net worth individuals special treatment but rather to place them under much higher scrutiny than most other groups (excluding organised crime and large businesses).
The PAC report implies something of a grey area in the way high net worth taxpayers are being treated versus the ordinary taxpayer. Avoiding HMRC scrutiny altogether is by far the best strategy, whether you fall into the highest net worth bracket or not.
For more information please contact me or your usual Bishop Fleming adviser.
The Pensions Regulator (TPR) has published the names of employers who have not complied with pensions auto-enrolment. These firms have been issued an escalating penalty notice. TPR’s list includes organisations that they have secured a…
Most people reaching state pension age today are receiving less than the new state pension. A Freedom of Information (FoI) request from the Sunday Times revealed an interesting fact about the new state pension, which…