£1.9-bn tax evasion in UK, but only one prosecution so far
Tax inspectors targeting Britain’s wealthiest people have identified potential evasion and avoidance worth nearly £2 billion, but have pursued only one successful criminal prosecution, a National Audit Office report reveals. It says the tax affairs of 6,500 super-rich individuals — each worth more than £20 million – are being examined by a specialist HM Revenue and Customs (HMRC) unit. The unit is investigating outstanding receipts worth £1.9 billion, a majority of which involve aggressive avoidance schemes.
However, just two individuals have been criminally investigated over the past five years, leading to a single prosecution, while another 70 were pursued through the civil courts.
In an indication of the scale of the task faced by the unit, the report discloses that each of the 6,500 super-rich taxpayers has had on average four serious tax issues looked at by the unit. Around 4,000 inquiries have been open for more than three years.
The report sheds a light on the scale of potential tax avoidance involving the super-rich and is likely to prompt further claims that Britain’s wealthiest people are not being pursued with the same vigour as benefits claimants or small businesses.
Meg Hillier, chair of the public accounts committee, which will question tax officials over its policies, said the findings would prompt further examination of the tax authority’s policies towards wealthy taxpayers. “This very low prosecution rate highlights the concern that high networth individuals and their tax advisers are always one step ahead of HMRC. We will be questioning HMRC about the level of prosecutions and whether it is stepping up to the plate.”
HMRC set up the specialist unit in 2009 after criticisms that it had failed to pursue wealthy taxpayers. Each wealthy individual is assigned a “customer relationship manager” within HMRC. Where high networth individuals are suspected of tax fraud, their case is passed to a team that examines whether the evidence is sufficient to merit a criminal, rather than civil, investigation.
The tax authority estimates that around £1.1 billion of the potential £1.9 billion in unpaid taxes is linked to tax avoidance schemes, and that 15% of the wealthiest have used at least one such scheme. THE GUARDIAN