High earners in the UK are facing a sharp increase in tax surveys as HM Income and Customs (HMRC) compliant income hits a record year.
Freedom of information requirements from accounting firm Pinsent Masons shows that HMRC’s wealthy and medium-sized business compliance bureau raised more than £1.5 billion from the survey in 2024, double the figure in the previous year. The Bureau focuses on individuals who earn more than £200,000 per year or hold more than £2 million.
The unprecedented reward has prompted HMRC to step up its compliance efforts, which will recruit 400 new expert compliance personnel over the next four years. The Ministry of Finance expects the expanded workforce to generate an additional £500 million in tax revenue by 2030.
“The HMRC has been set by the Prime Minister for some very difficult goals to impose additional taxes,” said Ian Robotham of Pinsent Masons. “It’s hard to see how they achieve these goals without a sharp rise in tax investigations on the rich.”
Tax authorities have been increasing their use of artificial intelligence and data analysis to eradicate tax avoidance and non-compliance. At the heart of its efforts is Connect System, a powerful data matching tool that cross-references to individuals and businesses’ tax returns through financial information in banks, land registries, social media and overseas jurisdictions.
Through global agreements such as the OECD’s common reporting standards, HMRC will now receive automatic notification when UK residents transfer funds to foreign accounts in participating countries.
Investigations can be triggered by abnormalities in tax returns, tips, or risk assessments. Once the review begins, high net worth individuals can be asked to provide detailed documentation including personal and commercial bank statements, trust deeds and offshore account details. They may also face interviews with compliance personnel.
The fine may vary by the nature of the violation – from simple carelessness to intentional concealment, and may exceed 100% of the tax owed. In serious cases, criminal prosecution is possible.
One of the highest visibility of HMRC’s tougher approach was in 2023, when Formula One Director Bernie Ecclestone pleaded guilty to fraud for failing to announce an offshore trust of more than £400 million. He avoided prison but paid £652.6 million in taxes, interest and fines.
The total amount HMRC collects from the wealthiest taxpayers (those who earn more than £200,000 or have significant assets) hit £5.2 billion last year, up from £4 billion in 2023. HMRC estimates that the group’s tax remains at £2.1 billion per year.
“It is our responsibility to ensure that everyone pays the right taxes in accordance with the law, regardless of wealth or status. The government is offering the most ambitious programme ever to close the tax gap and bring an additional £7.5 billion in public services to public services each year by 2029-2030,” HMRC said in a statement.
As the government wants to close the funding gap without further raising the title tax rate, the pressure on high-income earners to comply with an increasingly aggressive tax regime is increasing. Consultants firmly and firmly in the crosshairs, warning clients to ensure their financial affairs are watertight or risk the next step.
