Recommendations & Conclusions
27 items
2
Recommendation
40th Report - Collecting the right tax …
Acknowledged
Even among the wealthy population there are vast disparities in wealth and circumstance, making it likely that more tax is at risk for the wealthiest taxpayers. The population of wealthy taxpayers that HMRC’s wealthy team administers is getting bigger, up from 700,000 individuals in 2019–20 to 850,000 individuals in 2023–24. …
Government response. The government agrees with the recommendation and states that progress will be set out in its response, noting it is closely linked to recommendation 6b. No specific actions for this recommendation are detailed.
HM Treasury
3
Conclusion
40th Report - Collecting the right tax …
Accepted
HMRC cannot identify how much tax is paid by UK billionaires, despite the relatively small number of individuals and significant sums of money involved. HMRC can and must do more to understand and explain the contribution that the very wealthiest in society make to tax revenue. It has access to …
Government response. The government states the recommendation is implemented, with the First Permanent Secretary of HMRC having written to the Committee detailing steps to improve understanding of personal wealth and connected entities. HMRC also announced plans to enhance its approach to offshore …
HM Treasury
4
Conclusion
40th Report - Collecting the right tax …
Accepted
There is much more that HMRC can do to improve its work to risk assess and target wealthy people, in particular through the use of data and technology and recruiting wealth management experts. HMRC says targeting its resources on more complex, higher-risk, higher yield cases, has resulted in higher average …
Government response. The government states the First Permanent Secretary of HMRC has written to the Committee outlining how investment plans aim to improve compliance outcomes. HMRC is currently designing how investment will be deployed and will provide more detailed plans to the …
HM Treasury
5
Conclusion
40th Report - Collecting the right tax …
Accepted
Too many compliance investigations last too long, with too few leading to penalties and prosecutions. HMRC has different actions it can take against taxpayers who it identifies are at risk of not paying the right tax, including penalties, civil investigations into taxpayers suspected of fraud, and criminal investigations. The average …
Government response. The government has announced an ambition to increase positive charging decisions for harmful fraud by 20% to 600 per year by 2029-30, expecting a corresponding increase in criminal investigations of wealthy individuals. HMRC has already significantly increased investigations of wealthy …
HM Treasury
6
Conclusion
40th Report - Collecting the right tax …
Accepted
It is not sufficiently clear how much tax is paid, and how much tax is avoided by the very wealthy, which restricts HMRC’s ability to reassure the public that it administers the system fairly. Fairness is at the heart of HMRC’s charter. It is important for confidence and trust in …
Government response. The government agrees and states HMRC is scoping work to better understand and more accurately capture the contribution of wealthy individuals and their controlled entities to the overall tax gap. HMRC will write to the Committee in Autumn 2026 with …
HM Treasury
1
Conclusion
40th Report - Collecting the right tax …
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Revenue and Customs (HMRC) on collecting the right tax from wealthy individuals.1
Government response. The government committed to HMRC publishing its plan in spring 2026, detailing how it will improve compliance among wealthy individuals and setting out specific timelines and outcomes for each objective.
HM Treasury
7
Recommendation
40th Report - Collecting the right tax …
Accepted
We asked HMRC about its ambitions and priorities for ensuring that wealthy individuals pay all the taxes that they should. HMRC told us that it has significant opportunity to do more and that is working with Ministers to secure the funding and ensure that the wealthy team has the capacity …
Government response. HMRC will set out what investments will help improve a range of compliance outcomes for the wealthy customer population by Autumn 2026, after further design work on how the investment it has received through the Spending Review will be deployed. …
HM Treasury
8
Recommendation
40th Report - Collecting the right tax …
Accepted
HMRC told us that it wants to ensure that its wealthy team has the enablers and capabilities it needs to be more effective and productive in its work. It said that it is a constant endeavour for it to collect more tax from wealthy individuals because those who deliberately try …
Government response. HMRC will set out what investments will help improve a range of compliance outcomes for the wealthy customer population by Autumn 2026, after further design work on how the investment it has received through the Spending Review will be deployed. …
HM Treasury
9
Recommendation
40th Report - Collecting the right tax …
Accepted
HMRC told us that its ultimate objective is to reduce the overall tax gap, and it hopes the increase in its compliance activity will reduce the tax gap over the next few years.13 The Office for Budget Responsibility (OBR) has forecast a reduction in the tax gap from 4.8%, at …
Government response. HMRC will publish its plan in Spring 2026 on how it will improve compliance by the wealthy population and set out timelines and outcomes for each objective, as part of its Transformation Roadmap published in July 2025.
HM Treasury
10
Recommendation
40th Report - Collecting the right tax …
Accepted
Around 29,000 wealthy individuals had incomes of at least £1 million in 2023–24 and were liable for around £34 billion of Income Tax in total. Within this population are taxpayers with very high incomes and wealth: around 10,000 taxpayers have annual incomes of at least £2 million, and 5,000 have …
Government response. HMRC will undertake further analysis to enhance its understanding of how different levels of wealth and complexity impact risk in the wealthy population, to improve its identification and targeting of risk. Target implementation date: Autumn 2026.
HM Treasury
11
Recommendation
40th Report - Collecting the right tax …
Accepted
We asked HMRC whether it would be useful if it segmented the population of wealthy individuals to focus on the very wealthiest taxpayers, and whether it saw different risks from these wealthiest individuals.16 HMRC observed that people’s propensity for risk will vary and that it sees a lot of risk …
Government response. HMRC will undertake further analysis to enhance its understanding of how different levels of wealth and complexity impact risk in the wealthy population, to improve its identification and targeting of risk. Target implementation date: Autumn 2026.
HM Treasury
12
Conclusion
40th Report - Collecting the right tax …
Customer Compliance Managers (CCMs) within the wealthy team provide a single point of contact for the taxpayer and their agent and develop an in-depth understanding of a wealthy individual’s financial affairs to identify risks and support the taxpayer to be compliant. The wealthy team has around 100 CCMs in post …
HM Treasury
13
Conclusion
40th Report - Collecting the right tax …
HMRC highlighted that over 70% of the wealthy population has agents, and this increases to 90% for the wealthiest individuals.21 We asked HMRC about its plans to tackle unscrupulous tax agents. HMRC told us that its focus is on the behaviours of agents in general rather than necessarily specifically those …
HM Treasury
14
Recommendation
40th Report - Collecting the right tax …
Accepted
HMRC has an ambition to collect more information from wealthy individuals with more complex affairs, in line with international best practice. However, HMRC has set no firm plans or timescales.25 We asked HMRC about its progress in collecting more information from wealthy individuals. HMRC told us that it is for …
Government response. HMRC will request more data on assets and wealth from those taxpayers it suspects have high or very high levels of wealth and provide a further update in Autumn 2026 on any progress made on acquiring additional data sets. HMRC …
HM Treasury
15
Recommendation
40th Report - Collecting the right tax …
Accepted
HMRC could not tell us how many billionaires pay tax in the United Kingdom and explained that income and chargeable gains determine whether someone pays tax, not whether they are a billionaire. UK tax legislation does not require taxpayers to report data on their wealth, only on income and taxable …
Government response. HMRC will continue to enhance its understanding of billionaires with a UK tax footprint and provide assurance that all billionaires with a UK tax footprint in the wealthy population have an allocated Customer Compliance Manager (CCM). CCMs are senior tax …
HM Treasury
16
Recommendation
40th Report - Collecting the right tax …
Accepted
The Sunday Times Rich List 2025 listed 156 billionaires, compared with 165 last year. We asked HMRC if it has ever tried to link the Sunday Times Rich List with its own records to estimate how many billionaires on the list are tax resident in the UK. HMRC told us …
Government response. HMRC will continue to enhance its understanding of billionaires with a UK tax footprint and provide assurance that all billionaires with a UK tax footprint in the wealthy population have an allocated Customer Compliance Manager (CCM). CCMs are senior tax …
HM Treasury
17
Recommendation
40th Report - Collecting the right tax …
Accepted
The NAO’s report illustrates the vast difference in levels of wealth in HMRC’s wealthy customer group. For example, a billionaire could have 100 times more wealth than someone who fits the descriptor of a “high net worth individual”, and 500 times more wealth than someone who just meets HMRC’s definition …
Government response. HMRC will undertake further analysis to enhance its understanding of how different levels of wealth and complexity impact risk in the wealthy population, with target implementation in Autumn 2026.
HM Treasury
18
Conclusion
40th Report - Collecting the right tax …
The wealthy team has been generating more of its compliance yield from activities that promote compliance or prevent non-compliance, such as legislative changes, educating agents, and digital prompts within tax software, creating less need for HMRC to open a compliance investigation. HMRC said that by supporting more people to get …
HM Treasury
19
Conclusion
40th Report - Collecting the right tax …
A significant proportion of the wealthy team’s compliance investigations close with no yield — 46% in 2023–24, though down from 63% in 2022–23.35 We asked HMRC why nearly half of investigations resulted in no yield at all. HMRC explained that it does not know the facts of a case until …
HM Treasury
20
Recommendation
40th Report - Collecting the right tax …
Accepted
HMRC told us that the investment it secured as part of its recent funding settlement will help improve its data and understanding of the risks and better target its compliance activity so that, when it opens a case, it has 34 Q 87 35 C&AG’s Report, paras 3.10, 3.15-3.16 36 …
Government response. HMRC will set out what investments will help improve a range of compliance outcomes for the wealthy customer population by Autumn 2026, after further design work on how the investment it has received through the Spending Review will be deployed. …
HM Treasury
21
Conclusion
40th Report - Collecting the right tax …
In 2023–24, HMRC initiated compliance investigations in the majority of instances where it identified a risk of non-compliance.39 The average time it took HMRC to close an investigation increased each year over the period from 2018–19 to 2022–23 to a peak of 20 months, before falling to 14 months in …
HM Treasury
22
Conclusion
40th Report - Collecting the right tax …
We asked HMRC about the risk of people under investigation leaving the country, given that some investigations take so long to complete. HMRC conceded that taking too long to complete its complex investigations could present a flight risk but said that its agreements with international partners would mean it could …
HM Treasury
23
Recommendation
40th Report - Collecting the right tax …
Accepted
HMRC has issued fewer penalties to wealthy taxpayers in recent years, and criminal prosecutions of wealthy individuals have also declined. In 2023–24, HMRC issued 456 penalties to wealthy individuals, totalling 37 Qq 20, 87-88, 90 38 Q 105 39 C&AG’s Report, para 3.18 40 C&AG’s Report, paras 17, 3.20 41 …
Government response. HMRC will assess its use of powers to tackle non-compliance by the wealthy, in particular whether it makes sufficient use of available sanctions, and report back once the assessment has been completed. Target implementation date is Autumn 2026.
HM Treasury
24
Conclusion
40th Report - Collecting the right tax …
HMRC reserves criminal investigations for where it needs to send a strong deterrent message or where only a criminal sanction is appropriate.45 HMRC told us that deterrence works primarily through media and social media so focusing on the most severe cases, which will attract the highest penalties, is likely to …
HM Treasury
25
Conclusion
40th Report - Collecting the right tax …
We stressed to HMRC the importance of its role in ensuring it can assure ordinary taxpayers that everybody is paying their fair share of tax. HMRC told us that fairness is right at the heart of its charter, and that it wants to make it as easy as possible for …
HM Treasury
26
Conclusion
40th Report - Collecting the right tax …
HMRC is one of few tax administrations that publishes an annual estimate of the amount of tax revenue lost to wealthy individuals. It estimated this wealthy tax gap to be £1.9 billion in 2022–23, or 0.2% of all taxes owed. It uses its estimates as an indicator of its long-term …
HM Treasury
27
Conclusion
40th Report - Collecting the right tax …
We asked HMRC about its confidence in the accuracy of these estimates, observing specifically that the offshore tax gap seems low given that UK taxpayers held £849 billion in foreign accounts in 2019 and reportedly £570 billion in tax havens. HMRC told us that the wealthy and offshore tax gaps …
HM Treasury