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Mar 7, 2016

Dramatic Increase In Yield From HMRC's HNW Unit

Original published by Robert Lee,, London, 03 March 2016. UK tax authority HM Revenue and Customs's (HMRC's) High Net Worth (HNW) unit collected GBP29 (USD40.59) for every GBP1 spent on investigations in 2014-15, according to research by international law firm Pinsent Masons.

In a report on its news site,, Pinsent Masons explained that the tax take by the HNW unit rose from GBP268m in 2013-14 to GBP414m in 2014-15. In 2013-14, it collected GBP18 for every GBP1 spent on investigations.

The HNW unit was set up in 2009 to handle the tax affairs of the UK's wealthiest individuals.

Fiona Fernie, tax investigations expert at Pinsent Masons, said: "The improvement in ROI [return on investment] is particularly marked for investigations into High Net Worth Individuals. HMRC now has a whole host of tools at its disposal when it comes to identifying targets for investigation and collecting extra revenue from this group – including its sophisticated database system Connect."

"The Revenue – and Treasury – will want to focus on the most lucrative areas, so the expectation is that money will continue to be poured into this area to drive up its effectiveness and efficiency."

Investigations into large businesses recouped GBP73 per GBP1 spent in 2014-15, down from the GBP97 per GBP1 invested in 2013-14. HMRC's Large Business Directorate was set up in April 2014.

Fernie said: "The Large Business Directorate now covers an extra 1,300 companies. New targets will include a number of slightly smaller companies – investigations into which will naturally yield slightly less, meaning that the Revenue is now squeezing out slightly less per GBP1 invested than before."

"With the tax affairs of the UK's largest companies increasingly the focus of public attention, the Revenue is likely to continue to focus efforts here. HMRC, as always, needs to ensure that it doesn't squeeze too hard: it needs to balance its drive towards clamping down on abuse and avoidance against the need to maintain an attractive, business-friendly environment for major corporates and high net worth investors."