HMRC Under Scrutiny

Recent findings from the National Audit Office (NAO) have sparked fresh concerns around tax compliance among the UK’s wealthiest individuals. The report reveals that despite an increase in HMRC’s compliance yield from high-net-worth taxpayers — rising from £2.2 billion in 2019/20 to £5.2 billion in 2023/24 — there may be a deeper issue of under-reported non-compliance.

Notably, this surge in compliance yield exceeds HMRC’s own estimates of the “wealthy tax gap” by over £1 billion. This discrepancy raises questions about whether HMRC’s current tax gap modelling accurately reflects the scale of potential tax avoidance or evasion.

Adding to the concern is a steep decline in the number of penalties issued to wealthy individuals — down by more than 75% over the past five years. While this could suggest improved compliance, the NAO has warned it may instead signal an increase in undetected or unaddressed non-compliance.

HMRC is currently working toward an ambitious target: closing the tax gap and generating an additional £7.5 billion for public services by 2029/30. In parallel, political pressure is mounting for the Government to consider higher taxes on the wealthy ahead of the upcoming spending review.

What This Means for Our Clients

For high-net-worth individuals and those managing significant assets, this report serves as a timely reminder of the importance of proactive tax planning and full compliance. As HMRC intensifies its focus on wealthy taxpayers, having transparent, well-documented financial affairs is essential.

At Haslers, we continue to monitor developments closely and work with clients to ensure their tax strategies are compliant, efficient, and responsive to changes in legislation and enforcement priorities.

If you have concerns about your current tax position or would like to review your arrangements in light of this report, please don’t hesitate to contact our team.

Matt Rowland, Tax Partner

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