HMRC grows Affluent Unit in tax avoidance crackdown

A sharper focus on offshore banking activity and tax avoidance has seen HM Revenue & Customs grow its Affluent Unit by more than 50% in the past two years.

In 2013 the unit had 213 people in its function whereas now headcount sits at 327, an increase of 54%. It focuses on taxpayers with an income of more than £150,000, and sits alongside the high net worth unit.

With tax avoidance always high on the political agenda, accountancy firm Moore Stephens said HMRC was not only scrutinising the high net worth sector, but was casting its eye more broadly.

Partner at Moore Stephens Dominic Arnold said: “There is a strong political impetus behind maximising the tax take without increasing headline rates of tax. HMRC is as susceptible to political pressure as any other government department.

“This increase in headcount at the Affluent Unit is a clear indication that HMRC intends to squeeze more tax out of a wider group of taxpayers.”

Certain trends tend to catch the eye of the Affluent Unit: property and bank accounts held offshore; significant property holdings in the UK; those paying an unusually low rate of tax on total income; filing self-assessment returns late; and any previous involvement in a tax planning scheme.

“Taxpayers who think they may be in the sights of this unit should carefully examine their affairs.”

Moore Stephens added the wage bill for the Affluent Unit inspectors increased 68% over the same period from £7.8m to £13.1m.

Arnold added: “Like most central government departments, HMRC is under considerable pressure in terms of its budget but is determined to continue to ramp up its investigations into individual taxpayers.

“Taxpayers who think they may be in the sights of this unit should carefully examine their tax affairs.”