Source · Select Committees · Public Accounts Committee
Recommendation 23
23
Accepted
HMRC has issued fewer penalties to wealthy taxpayers, with fluctuating criminal prosecution numbers.
Recommendation
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 Q 96-97 42 Q 98-100 43 Q 90 15 £5.8 million. This is down from 1,747 penalties totalling £20.5 million in 2022–23, and 2,153 penalties totalling £16.2 million in 2018–19. HMRC explained that the number and value of penalties will vary depending on its caseload. For example, it charges automatic penalties for late filing, but other sorts of mistakes may not result in penalty charges. The number of wealthy individuals prosecuted following HMRC’s criminal investigations reduced significantly from 30 in 2019–20 to five in 2021–22 but has since increased to 25 in 2023–24. HMRC said it is expecting a 20% increase by 2029–30 in decisions to charge taxpayers with a criminal offence.44 In the wealthy individuals customer group, we presume this translates into five more taxpayers charged in 2029–30 than currently.
Government Response Summary
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.
Government Response
Accepted
HM Government
Accepted
5a. PAC recommendation: HMRC should assess whether it is using its powers to tackle non-compliance by the wealthy sufficiently, in particular, whether it makes sufficient use of available sanctions. 5.1 The government agrees with the Committee’s recommendation Target implementation date: Autumn 2026 5.2 HMRC will report back on this recommendation once its assessment of its application of powers and sanctions has been completed.