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HMRC's Affluent Unit Steps Up Efforts

by Robert Lee, Tax-News.com, London

17 November 2015


UK tax authority HM Revenue and Customs (HMRC) increased the number of staff working in its Affluent Unit by 54 percent in 2012-13 and 2014-15, according to accountancy firm Moore Stephens.

Moore Stephens said that the wage bill for Affluent Unit inspectors rose by 68 percent over the same period – the fiscal year 2012/13 to 2014/15.

The Affluent Unit was set up in 2011 and investigates taxpayers with an income of more than GBP150,000. According to Moore Stephens, there are a number of factors that can attract the attentions of the Affluent Unit, including: possessing offshore property and/or bank accounts; having significant property holdings in the UK; having an unusually low rate of tax on total income; filing self-assessment returns late; and previous involvement in a tax planning scheme.

Dominic Arnold, Partner at Moore Stephens, explained: "This increase in headcount at the Affluent Unit is a clear indication that HMRC intends to squeeze more tax out of a wider group of taxpayers. Additional tax inspectors at HMRC will be expected to pay for themselves many times over."

"Taxpayers who think they may be in the sights of this unit should carefully examine their tax affairs. There is a strong political impetus behind maximizing the tax take without increasing headline rates of tax. HMRC is as susceptible to political pressure as any other government department."

"Like most central government departments, HMRC is under considerable pressure in terms of its budget but is determined to continue to ramp up its investigations into individual taxpayers. The tax affairs of many of the taxpayers who are investigated by the Affluent Unit will be perfectly in order. Some of the measures HMRC uses to determine who faces scrutiny can be quite crude."

TAGS: individuals | compliance | tax | tax compliance | tax avoidance | budget | United Kingdom | tax authority | offshore | tax planning | HM Revenue and Customs (HMRC) | revenue statistics | HM Revenue and Customs (HMRC)

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