Accountancy firm UHY Hacker Young has released a statement about the rise in tax collected after HMRC's increase in investigations of high net worth indviduals including professional footballers.
The amount of extra tax collected by HMRC through investigations into high net worth individuals rose by 29 per cent to £1.2 billion ($1.58 billion) last year, up from £919 million in 2016/17, says UK accountancy firm UHY Hacker Young.
HMRC has increased investigations into HNW individuals following a 2017 Parliamentary report which found that HMRC’s crackdown on this taxpayer group was not as successful as it could have been. The report said that imposing more and greater penalties was not enough. More needed to be done to change behaviour, and to focus on particular classes of HNW individuals, such as professional footballers.
These penalties include Accelerated Payment Notices, and UHY Hacker Young said that taxpayers have 90 days after receiving an APN to pay the disputed amount and cannot appeal.
“HMRC sees high net worth individuals as a segment of the market that it can target in a more persistent and aggressive manner than other categories,” said Andrew Snowdon, partner and head of tax at UHY Hacker Young. “Given that there is little public sympathy for tax avoidance amongst the wealthy, HMRC knows that its tough approach towards this group of taxpayers is unlikely to be reined in. HMRC is using every tool in its toolbox, including controversial APNs which allow it to collect large amounts of disputed tax before an investigation is concluded or a tribunal has agreed that HMRC can take the tax. APNs are heavy-handed but very lucrative for HMRC.”
Snowdon added: “Data on taxpayers’ offshore bank accounts is now being fed through to HMRC from tax havens as part of a global transparency drive and HMRC can use this data for its investigations into HNW individuals. HMRC will receive data from another wave of countries later this year. HMRC’s hunger for more data on taxpayers is reflected in its latest proposals which would allow it to collect data from any business or organisation without any oversight – an alarming prospect. Although HMRC’s aim to maximise revenues is important, it needs to be careful. Ultra-high net worth individuals are extremely mobile and too tough a tax regime may impact the UK’s attractiveness as a centre for HNWs - which could be damaging both to the economy and tax revenues.”
Over the past twelve months, this publication has reported on the crackdown of tax avoidance of footballers. In April, WealthBriefing reported that HMRC is investigating 181 footballers at 51 Premier League and Football League clubs in a huge probe into tax avoidance linked to image rights payments.
This publication has contacted HMRC about the data – and has asked it for a comment, and will update in due course.