As published on citywire.co.uk, Tuesday 25 August, 2020.
HMRC has launched a tax evasion investigation into 250 wealthy taxpayers as it seeks to show its commitment to battling sophisticated tax evasion.
Around 250 taxpayers, as well as 23 businesses in the UK, were referred to tax evasion teams in the year to March, according to Freedom of Information requests submitted by law firm Pinsent Mason.
HMRC has ramped up its crackdown on high net worth tax evasion, promising to increase the number of criminal investigations it engages in following the leak of the Panama Papers in 2016.
Following the leak, the government launched a taskforce to analyse the data it provided and open civil as well as criminal probes.
Andrew Sackey, partner at Pinsent Masons, said: ‘HMRC clearly now has the behaviours of a number of the UK’s biggest businesses in its sights. If a case is referred to the tax evasion referral teams then detailed investigations are almost certain to follow.
‘For large corporates that do find themselves in the tax tribunals for alleged evasion, the reputational risks are substantial.’
In his March budget, chancellor Rishi Sunak said the government had raised £4.4bn through cracking down ‘avoidance and evasion’ and added that such revenues could help pay for ‘coronavirus-related economic assistance programmes’.
High-profile HMRC interventions this year include TV presenter Eamonn Holmes facing a tax bill following a IR35 ruling.
In February, there was a probe into UK family offices with an estimated £1tn in inheritance tax vehicles.
Sackey added that furlough fraud was likely to be of particular interest over the coming months and years, having already launched its first ‘dawn raids’ against suspected offenders.
‘HMRC are aware of recent reports that large numbers of furloughed workers continued to work and will be reviewing the claims put in by businesses of all sizes and we can expect plenty of investigatory activity in this area,’ he said.