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Bad news for those earning £150,000 or more


HMRC cracks down on anti-avoidance for 'affluent' taxpayers through their rapidly expanding taskforce

"Affluent" taxpayers with annual incomes of £150,000 or more are being targeted by HMRC as part of a national crackdown on tax avoidance.
Until recently the taxman was mainly investigating "high net worth" individuals - those earning £1m or more - but now their attention has shifted further down the income scale.
The so-called "Affluent Unit", which concentrates on people who earn enough to pay 45pc additional-rate tax, has increased its headcount by 54pc in two years, from 213 in 2012-13 to 327 in 2014-15.
The rapid growth reflects the new, expanded budgets being granted to HMRC in the drive to improve revenue collection. The wage bill for the unit grew 68pc over the period from £7.8m to £13.1m.

Set up in 2011, the Affluent Unit is especially interested in those owning property or bank accounts offshore, along with significant property holdings in the UK.

Those paying low rates of tax on total income are likely to be subject to scrutiny, even though there are legitimate ways in which high earners can significantly reduce their tax bill.

Those who file self-assessment returns late are also likely to be picked up. HMRC is also likely to monitor anyone who has previously invested in a scheme devised to reduce tax bills.

Dominic Arnold, partner at Moore, comments: “This 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. 

All political parties are keen to improve tax collection rates, he said.

“There is a strong political impetus behind maximising 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. It is determined to continue to ramp up its investigations into individual taxpayers."

Number of inspectors hired to investigate "affluent" taxpayers


An HMRC spokesperson said: "We are better than ever at moving resource to risk as these figures of extra staff deployed tackling non compliance clearly show. Anyone who has not paid the tax they owe should get in touch with us urgently as coming forward means a lower penalty." 

For further information or sound, impartial advice on tax issues please contact Mike Wakeford, partner at Moore Stephens South's Chichester office.

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