Rich tax dodging could be “much greater than thought”, says the UK Audit Office

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The Rich People Avoidance Scale and evasion could be much higher than the UK’s fiscal authority previously thought, according to a report from the National Audit Office.

The rich people, defined by HM Revene & Customs, such as those gaining more than £ 200,000 per year or with assets of more than £ 2 million, paid £ 119 million in personal taxes by 2023-24, with an average of £ 140,000 per person. The sum represented 25 percent of the UK personal tax receipts.

But the complexity of most rich people’s affairs made HMRC difficult to identify the tax that owed them and presented them opportunities to prevent them from paying the correct amount, warned Nao in a report On Friday.

The report said that by 2022-23 the HMRC estimate of the “tax gap” between this cohort, the difference between the amount of tax to be paid and the one that was actually paid, had been only 1.9 million pounds.

However, it was found that HMRC had subsequently doubled the annual “compliance performance” of 2.2 million pounds during 2019-20 to 5.2 million pounds in 2023-24. The term refers to the tax revenue that HMRC has collected due to its work to ensure compliance.

The figures show that HMRC had collected more taxes than it previously believed, according to the report.

The Nao report said: “This raises the possibility that the underlying levels of breach among the rich population could be much larger than they thought before.”

Despite the growth of the population of rich people, the number of criminal processes for unpaid taxes and HMRC penalties issued to rich people has declined in recent years, the report added.

Gareth Davies, Nao Chief, said that HMRC deserved a credit to greatly increase the additional tax revenue that his fulfillment work had contributed as rich taxpayers.

But he added: “This may indicate that the levels of breach are higher than those estimated above. HMRC should also try to provide greater transparency to give greater confidence to the public than all taxpayers bring their just quota.”

The report also addressed issues on tax evasion and the avoidance of rich people abroad, which Nao said that HMRC had recognized as a key risk.

The report said HMRC’s Public estimation That 300 million pounds were lost in tax revenue during this route in 2018-19, the most recently available, did not completely capture the amount of potential lost tax.

The report said that UK tax residents had £ 849 million in the sea in 2019. He added: “Internally, HMRC has identified a much higher amount of tax at risk of all forms of offshore breach, but does not publish this figure.”

In the meantime, the Tax Office had only established a “limited strategy” to address the tax evasion and the avoidance of the rich people, said Nao.

In the autumn budget the government Financing provided The report noted for an additional compliance staff of 5,500 HMRC for the next five years. However, he said that the tax office did not yet have a clear plan to ensure that the team had the specialized staff they needed.

Among various recommendations, the report asked HMRC to develop a “strategic vision and a strategy plan” to combat rich breach and provide “sufficient transparency to give greater confidence” to the public.

Caitlin Boswell, head of defense and policy of Tax Justice UK, a group of campaigns, pointed out the growing gap between the tax that the richest people owed and the one who really paid.

“This is due to things like high seas secret tax paradises used to be active that the fiscal authority has no supervision,” he said.

He also blamed the problem of using rich people’s tax agents to exploit “system lagoons”.

HMRC said it was their duty to ensure that everyone paid for the right tax under the law, “regardless of wealth or state.”

He added: “The Government is delivering the most ambitious package that has ever been closed to close the fiscal gap and provide additional $ 7.5 million for public services in 2029-30.”