The Joy of Affluence

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).

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."

However, despite all the puff and bluster of Beaker, nothing tangible has thus far been done by HMRC to recruit these extra 100 inspectors.

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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Click the link to read about: Tax Investigation for Dummies

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The Joy of Affluence

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).

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.

That's all very nice and dandy, maybe.

However, please could someone explain to me why HMRC also has another unit that also focuses on "wealthy" people?

HMRC's "High Net Worth Unit" focuses on people with assets of more than £20M.

Why does HMRC need two units?

Does this mean that the Affluent Unit doesn't look at tax evasion by those worth more than £20M?

Why are they not merged into one; thus saving time, money, resources and confusion?

Comments and views welcome, as always.

Tax does have to be taxing.



Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC's Customer Relationship Managers

As we shake off the dregs of the Bank Holiday weekend, and gently ease ourselves into the week ahead, here is an amusing variation on the concept of a "customer relationship manager" courtesy of HMRC.

In the real world CRM's are (in theory) meant to act as the interface between the customer and the organisation that they represent (eg bank, FMCG etc etc); hopefully smoothing away any "irritations" that may have upset the customer, thus leading the way to increased sales etc.

In HMRC's world a CRM is assigned to those "customers" (ugh how I loath that word when used in connection with tax matters) who come under the remit of HMRC's Affluent Unit. The Affluent Unit was set up in September 2011, with much fanfare by Danny "Beaker" Alexander, to handle the tax affairs of those individuals who earn more than £150K per annum. It consists of around 2,000 experienced HMRC staff members, who were reassigned from other duties within HMRC.

HMRC's publicly stated purpose of their CRM's is to provide better “customer service”. However, as the Telegraph notes, the CRM also builds up a detailed knowledge of their "customer's" tax affairs. Thus HMRC is in a better position to identify possible tax evasion, and will use the information garnered by the CRM's to investigate their clients.


Tax does have to be taxing.



Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Beaker's Terrific Wheeze III - Weasel Words

I am pleased to see that it is not just this site, and its loyal readers, who can see that Danny "Beaker" Alexander was bullshitting when he claimed that HMRC would recruit an extra 2,000 or so tax inspectors for the new Effluent....sorry...I mean Affluent Unit.

None other than the FT has also pointed out that he talking bollocks, and that the job cuts (from 66,000 to 56,000 by 2015) in HMRC will continue.

Unsurprisingly, I am still waiting for him to answer my Tweet to him about it...I won't hold my breath!

Here is the FT article in full:

"Conference platforms can turn even quite decent ministers into smoke-and-mirrors artistes. Take those press reports from the Lib Dem conference in Birmingham about HM Revenue & Customs recruiting thousands of staff to launch a crackdown on the rich. “Extra inspectors recruited to target wealthy tax avoiders,” proclaimed the Independent. Under the banner “Soak the Rich!” the Daily Mail reported that Treasury chief secretary Danny Alexander was “recruiting a team of 2,250 tax inspectors to launch raids on the wealthy”. I trust Notebook readers were not taken in.

Well you didn’t think that the auburn-haired Mr Alexander meant that extra people were being recruited did you? 

Surely you were savvy enough to spot the weasel words? 

What the minister said was that “an additional 2,250 staff will move into new anti-evasion and avoidance jobs”. 

In plain English, existing HMRC staff will move from their present jobs to work on tax evasion by the rich in a new “affluent” unit. Mr Alexander told the Lib Dems that “this month over 1,000 of these jobs are being advertised”. And so they are – all of them internally. (No, I wouldn’t dream of describing him as Duplicitous Danny. He is just dexterous with words.) Meanwhile, the cull of HMRC staff from the present 66,000 to 56,000 in 2014/15 continues. 

HMRC insiders are cynical about the whole exercise. “It takes four years to train a tax inspector,” says one. “You can’t just whistle ’em up. And you’d need the best ones – senior civil servants – to tackle rich people who hire top accountants to advise them how to avoid tax legally. 

“The risk is that by taking staff away from chasing ordinary people, who provide the bulk of tax revenue, the Exchequer will lose out. It’ll be interesting to see if the numbers will really add up.” 

HMRC’s new “affluent unit”, whose old staffers will concentrate on the 350,000 people earning more than £150,000, has been told to bring in an extra £560m for the Exchequer by 2014/15. That will be election year. The punters will not want any tricksy interpretations of the word “extra”."

Tax does have to be taxing.

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Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"