Taxman’s hard line against wealthy yields extra £137m

The unit targets 500,000 taxpayers with an annual income of over £150,000 or wealth in excess of £1m

A crackdown on taxpayers earning more than £150,000 a year or wealth exceeding £1m has led to an extra £137.2m being raked in by HM Revenue and Customs’ Affluent Unit, research shows.

The extra scrutiny carried out by HMRC has resulted in a 60 per cent jump in the amount collected, according to the law firm Pinsent Masons.

Last year £137.2m in additional tax from investigations was collected, up from £85.7m in 2013 and well ahead of government expectations from the unit set up in 2011.

The unit targets 500,000 taxpayers with an annual income of over £150,000 or wealth in excess of £1m, and was set up to tackle wealthy individuals who did not fall within HMRC’s High Net Worth Unit.

James Bullock, head of litigation and compliance at Pinsent Masons, said: “This surge in revenue from Affluent Unit investigations serves as a reminder that HMRC is widening its lines of inquiry. It is no longer focusing solely on the super-rich. People who would just consider themselves moderately successful professionals and businesspeople are now also coming under scrutiny.

“This unrelenting attitude is being backed up by new civil powers to pursue unpaid tax and a much more aggressive approach to prosecutions.”

In 2013 the unit was expanded, dropping the threshold for investigations from wealth between £2.5m and £20m to include those with a net worth of £1m – adding 500,000 taxpayers.

The Treasury initially said it wanted to see the unit bringing in an extra £75m in tax by 2012, and has a target of £586m by the end of 2015.

Some businesses have privately questioned the tougher approach from HMRC, which came after revelations that officials had signed deals with major companies to lower their tax levels.

Mr Bullock warned: “Whilst the fact that more is being raised from investigations should as a general principle be welcomed, HMRC needs to be vigilant that over-zealous use of some of its new powers does not end up being damaging to business.”

Multinational companies have taken the brunt of public anger over tax avoidance, with Amazon, Starbucks and Google all hauled before committees of MPs. An EU investigation into Amazon and an alleged tax agreement with Luxembourg is ongoing.

In recent years individuals have been criticised for investing vast sums of personal wealth into tax avoidance schemes which have since been shut down.