By Steven Pinhey, Tax Director
The National Audit Office recently issued its report on ‘HMRC’s approach to collecting tax from High Net Worth individuals’.
The report is full of statistics including that there are around 6,500 High Net Worth (HNW) individuals in the UK (i.e. individuals with a net worth of £20 million or more) accounting for 0.02% of the taxpayer population. This group brought in more than £4.3 billion in tax in 2014/15 or 1.3% of the total tax revenues. When the component parts are considered £880 million related to capital gains tax alone accounting for 15% of all capital gains tax receipts in the year.
HNW and Ultra High Net Worth (UHNW) individuals create many problems for HMRC. Their affairs are often intricate including various classes of assets situated in various countries and all wrapped up in complex structures. However, the most worrying statistic from the report is that HMRC are investigating HNW individuals with tax collection target of £1.9 billion! That’s not far off half the entire tax collected from this group in 2014/15. Of that figure a staggering £1.1 billion relates to the use of marketed avoidance schemes – made even more surprising when we learn that only around 15% of HNW individuals have used a tax avoidance scheme!
The spotlight is clearly on our country’s most wealthy people and it is imperative that they receive sound, relevant, commercial tax advice. If you are concerned about the attention that you are receiving from HMRC or are worried that your affairs aren’t being given the appropriate level of attention from your adviser and would like to talk to someone in a discreet and confidential manner, please speak to Steven Pinhey, our Head of Tax Disputes and Resolutions, on 020 7490 7766 or email email@example.com.