Tax

Is HMRC Helping The Rich Avoid Paying Tax?

HM Revenue and Customs (HMRC) helplines are obviously anything but – unless you are a wealthy taxpayer.

Anyone who has had to call HMRC for some information about their tax affairs will know the person on the other end of the phone will refuse to give any advice.

HMRC’s stance is taxpayers are responsible for their own financial affairs and an adviser or inspector will only step in once a form is filed or missed.

But MPs on the Parliamentary Public Accounts Committee have accused HMRC of favouring the richest taxpayers in a new report.

They say ‘customer relationship managers’ assigned to high net worth taxpayers give them help that is not offered to anyone else to make sure they pay the right amount of tax.

Unconvincing arguments

“HMRC repeatedly told us that it does not give advice to taxpayers,” said a report from the committee.

“However, we were not convinced by its assertion that there is a clear line between giving its view on potential transactions and giving tax advice, and we do not think there is enough clarity about what customer relationship managers can and cannot do.

“In addition, while calls from most taxpayers to HMRC call centres are recorded routinely, meetings and phone calls with high net worth individuals are not recorded.”

The MPs criticised HMRC for the way the tax affairs of wealthy taxpayers are handled.

“HMRC publishes little information about the approaches it takes or the number of criminal investigations and prosecutions in progress,” the report said.

Tax take falls by £1 billion

“The lack of transparency leaves the department open to the perception that, in its dealings with taxpayers, there is one rule for the rich and another for everyone else.

“HMRC told us that its compliance work with high net worth individuals has been a success. Its approach to high net worth individuals has changed over time and it now appears to be taking a tougher line with those who break the rules.”

According to HMRC, 6,200 taxpayers with a net worth of £20 million or more come under the scrutiny of the High Net Worth Unit. These wealthy people pay up to £4 billion a year income tax and capital gains tax – although the committee was told this has fallen by £1 billion since the unit started working with taxpayers.

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