HMRC raises yield from wealthy taxpayers again

25 April 2013

The top one per cent of earners paid 26.5 per cent of the government's total income tax take in 2012/13, according to figures from HM Revenue and Customs.

This group earned a total annual gross income of GBP105 billion, on which they paid total income tax of GBP42 billion. This indicates an average income tax rate of just under 40 per cent, though it is not clear how many individuals are in this top 1 per cent bracket.

HMRC also announced that its High Net Worth Unit increased its yield from tax enquiries by 10 per cent to GBP220 million in the 2012/13 tax year. The unit, set up in 2009, examines the tax affairs of 5,800 people with assets in excess of GBP20 million. It now employs 380 staff as the government has increased its resources in an effort to reduce the public spending deficit.

However, the additional GBP220 netted from the unit's enquiries represents only one-seventh of one per cent of HMRC's total income tax revenues of GBP159 billion.

"HMRC continues to squeeze more out of the rich, although at a slower rate of increase than the year before", commented Ray McCann of law firm Pinsent Masons. This, he said, suggests HNWU is operating at near capacity or has not identified many new taxpayers to work on.

The introduction this year of an annual tax on high value residential property owned through a corporate envelope may add extra impetus to the unit. Wealthy taxpayers who own such structures will now need to file a return, and HMRC is likely to pick these up in order to investigate the underlying structure to check for errors or omissions, noted McCann. The additional scrutiny from HMRC may prompt new enquiries in relation to domicile and remittance issues.

 

Sources

HM Revenue & Customs

Pinsent Masons

 

 


Advert

Article Search

Browse jurisdictions by clicking on the map regions below

Capital G
© 2013 Society of Trust & Estate Practitioners