HMRC estimate that its specialist unit dedicated to collecting tax from high net worth individuals raised £416 million from compliance work with this group in 2015–16, according to a report by the National Audit Office (NAO). This is separate from tax already declared by these individuals.

The NAO also suggested that, as this specialist unit expands, HMRC needs to do more to identify the most effective approaches to maximising the tax revenue paid by the very wealthiest people in the UK.

In 2009, HMRC established the High Net Worth Unit, a specialist unit to manage the tax affairs of high net worth individuals to give it a better understanding of the overall tax position of high net worth individuals and their behaviour. At the start of 2015–16 HMRC considered there to be around 6,500 high net worth individuals, roughly 0.02% of all taxpayers.

In 2014–15, high net worth individuals paid over £4.3 billion in tax. This included £3.5 billion in income tax and national insurance (1.3% of the total revenue for those taxes) and £880 million in capital gains tax (15% of all CGT).

The report stated that HMRC is investigating risks from high net worth individuals with a potential value of £1.9 billion. This figure is an initial estimate of the tax that could be due and covers more than one tax year. £1.1 billion of this relates to the use of marketed avoidance schemes; around 15% of high net worth individuals have used at least one scheme.

HMRC has identified that the risks from high net worth individuals relate primarily to tax avoidance and the legal interpretation of complex tax issues, rather than tax evasion. HMRC is currently running a formal enquiry on around a third of high net worth taxpayers, with an average of four issues being examined per taxpayer.

During 2015–16, HMRC undertook a review and identified an extra 1,000 people with net worth of more than £20 million.

HMRC has developed its approach to high net worth individuals over time. HMRC initially focused on getting a better understanding of the circumstances of high net worth individuals. It has since refined its approach to become increasingly focused on the riskiest taxpayers.

HMRC has not evaluated its approach to high net worth individuals. While HMRC knows more about this group than it did when the high net worth unit was set it, it has not looked at what works and why in its current approach. It could use such analysis to increase the impact of its work.

The Institute’s Northern Ireland Tax Committee is in regular contact with the head of the HNWU’s East Kilbride unit which deals with mainly with NI HNWU taxpayers. An update on the work of the unit was published in an August 2016 edition of Chartered Accountants Tax News.

The NAO also published its 2015/16 departmental overview which looks at HMRC and summarises its performance during the year ended March 2016.