HM Revenue & Customs (HMRC) is launching a crackdown on top earners who are not paying their fair share of tax.
The taxman already has a special Affluent Compliance Team, consisting of 200 staff across the UK, who work to ensure “the better off play by the rules”.
What the Affluent Compliance Team does
The unit looks specifically at taxpayers with an annual income of more than £150,000 and wealth of between £2.5 million and £20 million.
However the team is being boosted with the addition of 100 new inspectors. As a result, the unit will now also look into those with wealth in the range of £1 million to £2.5 million.
Who the team targets
According to HMRC, the sort of people that the Affluent Compliance Team targets tend to be those who:
- Habitually use avoidance schemes
- Have a low effective rate of tax across their total income
- Have bank accounts in Switzerland and who appear to be understating their tax liability
- Fail to file their self-assessment tax return on time
- Avoid or evade Stamp Duty on property purchases
- Have UK and offshore property portfolios.
[SPOTLIGHT]Since its launch the team has brought in an extra £75 million in tax, which HMRC says is well ahead of expectations. It has a target of retrieving £586 million by the end of 2015.
Exchequer Secretary David Gauke said: "The vast majority of people pay their way. Dodging tax is immoral, illegal and unaffordable and the minority who cheat are increasingly finding that, thanks to the work of the Affluent Team, they have made a big mistake."
We are all in it together?
It’s undoubtedly a good thing that HMRC is cracking down on those top earners who find ways to cut their tax bill.
Last year the news was filled with stories about a succession of high-profile figures, from Jimmy Carr to Gary Barlow, who were making the most of a variety of schemes which lowered their tax liabilities. With the economy still on life support, it’s only fair that we all pay our way.
However just as important as tax-dodging top earners are the businesses who appear to be sidestepping their own tax responsibilities. It will be interesting to see how the taxman plans to address that issue in the year ahead.