In October last year I wrote about the expansion of HMRC's "Affluent Unit":
"Much has been made by some, eg Danny "Beaker" Alexander, about the expansion of HMRC's "Affluent Unit" (the team set up in October 2011 that targets tax evasion by "wealthy" people - those worth more than £1M).However, despite all the puff and bluster of Beaker, nothing tangible has thus far been done by HMRC to recruit these extra 100 inspectors.
Beaker said the other week that an extra 100 inspectors and specialists will be recruited to scrutinise the tax affairs of the 500,000 wealthiest people in the country."
Fear not HMRC have realised that they actually now need to back up Beaker's words with some action, on Wednesday this week HMRC announced that they will begin recruiting the extra 100 inspectors. Adverts, allegedly, will start to appear at the end of this month (some 4/5 months or so after Beaker made his announcement, there's dynamism for you!).
Oh, and by the way, could someone please tell me why HMRC simply doesn't merge the "Affluent Unit" with its "High Net Worth Unit"; thus saving money and resources and focusing its skills/knowledge in one single department?
Here is HMRC's announcement in full (I am gemused to see that the definition of wealthy people targeted covers many of our elected representatives!):
"The tax team dedicated to ensuring the better off play by the rules is set to expand, HM Revenue and Customs (HMRC) said today.
The Affluent Compliance Team is to begin recruitment of 100 additional inspectors as the work of the unit expands.
In addition to taxpayers with an annual income of more than £150,000 and wealth of between £2.5 million and £20 million, the unit will also cover those with wealth in the range £1 million to £2.5 million.
By the end of December the unit had brought in an extra £75 million in tax - well ahead of expectations – with a target of £586 million by the end of 2015.
Exchequer Secretary David Gauke said:
“HMRC set up the new Affluent Teams from some of the £917 million we made available in 2010. The team has made a great start by bringing in £75 million in additional tax that would otherwise have been lost to the country.
“The vast majority of people pay their way. Dodging tax is immoral, illegal and unaffordable and the minority who cheat are increasingly finding that, thanks to the work of the Affluent Team, they have made a big mistake.”
Roger Atkinson, Director of the Affluent Teams, said:
“In September 2012 the Government announced an additional investment of £5 million, enabling us to recruit an extra 100 inspectors. We will recruit from within HMRC and externally and the new team will be fully operational by April and focused on delivering an additional £75 million a year.
“We want to recruit people with external experience and appropriate qualifications for inspector and lead case director roles. We want people with recent commercial and corporate experience in personal tax to help us understand our customer base. This is an exciting opportunity to work at the forefront, tackling those who do not pay the right tax.
“Good quality intelligence is central to catching the cheats and so we are expanding our Affluent Intelligence Unit fourfold.
“This is very good news for all honest taxpayers.”
Notes for editors
1. The affluent population covers those with income over £150,000 or wealth between £2.5 and £20 million, consisting of about 300,000 people.
2. The team currently has 200 staff based in17 teams in six locations across the UK.
3. Common characteristics of the Affluent Compliance Team’s targets:
Wealthy people who
-habitually use avoidance schemes
-have a low effective Rate of Tax across their total income
-have bank accounts in Switzerland who appear to be understating their tax liability
-fail to file their Self Assessment return on time
-avoid or evade Stamp Duty on property purchases
-have UK and offshore property portfolios
4. Adverts for the 100 additional inspectors will appear towards the end of January."
Tax does have to be taxing.
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The more HMRC fails on inspectors the more people will undertake avoidance measures or cross the line into evasion.
ReplyDeleteFor myself, I'm quite happy that HMRC has got rid of thousands of decent, knowledgeable inspectors since the IR / C&E merger as it makes my job as an adviser to clients wishing to minimize their tax bills much, much easier.
Provided that electronic paper trails are minimized and obvious errors aren't undertaken there is about 1-in-40 chance of my clients being investigated by HMRC.
HMRC has become a joke. If their computers don't flag up an obvious discrepancy in automated information, it won't get found.
Affluent = Effluence
ReplyDeletePardon my scepticism, hope the new staff remember that it is difficult to open your mouth when you are up to your neck in it.
Compliance is a box ticking exercise operated by those who have to wear blinkers, and if they think the new recruits will be up and running and effective that quickly they are in for a shock - or are they recruiting recently retired tax inspectors?
£917m + £5m = £922m.... at £75m a year extra tax (if they can do it), it will take them 12 years + to recoup the investment - there will be more expense along the way, I'm sure.
ReplyDeleteWhich government will be in power in 12 years time. Do HMRC seriously believe they will be left along to get on with the job? If so, they are living in cloud cuckoo land. For me, the more failed initiatives the better :)
Just what does it take to get this sorted out, the amount of money haemorraging is beyond belief?
ReplyDeleteMost reasonably aware people know of the connections between politics and Big Business via a variety of subtle and sometimes not so subtle routes e.g. lobbying, offshore buffered holdings/trusts etc. Has it got to such a stage where the global players simply do what they want with impunity?
Whether its evaded or avoided, its tax lost to the UK taxpayers.
HMRC is an ineffective organisation that has a bark far worse than its bite. Change on a grand scale is far overdue.
Message for those in power - do something!
"could someone please tell me why HMRC simply doesn't merge the "Affluent Unit" with its "High Net Worth Unit"; thus saving money and resources and focusing its skills/knowledge in one single department?"
ReplyDeleteThe two teams do very different things.
HNWU deals with all aspects of the tax affairs of the very wealthiest in the UK (I forget the thresholds off the top of my head, but we're talking about the super-rich; the Bransons, etc, of the world). This will include the administrative side of their tax returns, customer (sorry - yawn) service, dealing with pre-clearances and handling disputes over the tax treatment of certain items. It will also involve a certain amount of investigation of avoidance and (I would expect rarely) evasion risks, though I believe some of the highest-risk work of that type will be referred to the Specialist Investigation unit.
The Affluent Unit, meanwhile, deals with the next tranche of wealthy individuals down. The very rich if you like, rather than the super rich. Accountants, influential bloggers, etc! :) Also, rather than dealing with all aspects of their tax affairs, the team works on specific, mainly avoidance-related risks in this segment.
Of course, as this information is in the public domain, you'll already know the above from your own research, so perhaps I've missed something and you've seen cross-overs between them and/or potential economies from amerger that I haven't. As ever, more than happy to discuss.
Stew G
HMRC appears to want to be more chummy with those who fall into the HNWU remit.
ReplyDeleteHMRC's stated view of the ultra-high net worth individuals targeted by HNWU is couched in very collaborative language,’ Levy wrote in Tax Journal (18 November 2011).
The HNWU’s stated aims are to ‘build relationships to better understand these customers and make it easier for them to pay the right amount of tax [and] tailor service delivery for these customers through proactive engagement and provide a single point of contact and a holistic approach to their tax affairs’.
Re "more chummy", without wishing to go into the rights or wrongs of such an approach: yes, sort of. Has your question re the scope for merging HNWU and the Affluence Unit been answered, though?
DeleteSG
Here are the jobs: http://www.etaxjobs.com/candidate/recruiter-jobs-hmrc-personal-tax-jobs-479.html
ReplyDeleteThe internal recruitment process in HMRC is a total joke. They are not recruiting the best people for the jobs. There is no chance of the so called re-investment generating anything like the return they are looking for as those working proficiently within tax disciplines are having to stay tight lipped whilst people with no past knowledge are taken into teams at higher grades. All that is happening up to 2015 is mass training programmes via the inept Tax Professional Qualifications which cannot deliver like external training can.
ReplyDelete