Friday, January 27, 2017
Does HMRC apply different rules for the mega rich?
While the vast majority of us are struggling to make ends meet the Commons Public Accounts Committee alleges that Britain’s wealthiest people appear to be getting preferential treatment from HM
Revenue & Customs and are not being properly pursued for
outstanding tax bills.
The Guardian say that the spending watchdog has concluded that HMRC’s failure to clamp down on rich tax dodgers is undermining confidence in the whole system:
The highly critical report released on Friday examined HMRC’s specialist unit, which collects tax from high net-worth individuals with more than £20m. It found that “the amount of tax paid by this very wealthy group of individuals has actually fallen by £1bn since the unit was set up” in 2009 – even as tax receipts rose to £23bn.
Meg Hillier, the Labour MP who chairs the committee, said HMRC’s claims about the success of its strategy to deal with the very wealthy did not add up.
“Cosy terms such as ‘customer relationship manager’ and HMRC’s reluctance to be open add to the picture of arrangements that, while beyond the reach of ordinary taxpayers, are also ill-suited to the increasingly sophisticated methods the super rich can use to reduce the tax they pay,” she said.
“If the public are to have faith in the tax system then it must be seen to have fairness at its heart. It also needs to work properly. In our view, HMRC is failing on both counts.”
Tax officials have calculated that there were about 6,500 high net-worth people in 2015-16, about one in every 5,000 taxpayers. The report found HMRC had a “dismal record” when it came to prosecuting the very wealthy for tax fraud in the criminal courts.
The report says that in the five years to 31 March 2016, it completed just 72 fraud investigations into high net-worth individuals, with all but two having been dealt with using its civil powers. Only one case resulted in a successful criminal prosecution.
Of the 850 penalties issued to the very wealthy since 2012, the average charge was £10,500 – a figure the committee said was likely to be too small to act as a deterrent.
Surely it is time to redress the balance and make sure that people pay what is due.
The Guardian say that the spending watchdog has concluded that HMRC’s failure to clamp down on rich tax dodgers is undermining confidence in the whole system:
The highly critical report released on Friday examined HMRC’s specialist unit, which collects tax from high net-worth individuals with more than £20m. It found that “the amount of tax paid by this very wealthy group of individuals has actually fallen by £1bn since the unit was set up” in 2009 – even as tax receipts rose to £23bn.
Meg Hillier, the Labour MP who chairs the committee, said HMRC’s claims about the success of its strategy to deal with the very wealthy did not add up.
“Cosy terms such as ‘customer relationship manager’ and HMRC’s reluctance to be open add to the picture of arrangements that, while beyond the reach of ordinary taxpayers, are also ill-suited to the increasingly sophisticated methods the super rich can use to reduce the tax they pay,” she said.
“If the public are to have faith in the tax system then it must be seen to have fairness at its heart. It also needs to work properly. In our view, HMRC is failing on both counts.”
Tax officials have calculated that there were about 6,500 high net-worth people in 2015-16, about one in every 5,000 taxpayers. The report found HMRC had a “dismal record” when it came to prosecuting the very wealthy for tax fraud in the criminal courts.
The report says that in the five years to 31 March 2016, it completed just 72 fraud investigations into high net-worth individuals, with all but two having been dealt with using its civil powers. Only one case resulted in a successful criminal prosecution.
Of the 850 penalties issued to the very wealthy since 2012, the average charge was £10,500 – a figure the committee said was likely to be too small to act as a deterrent.
Surely it is time to redress the balance and make sure that people pay what is due.
