Former Tax & IT Partner
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Rich and wealthy: Front view of a red super sport car (Lamborghini) parked alongside luxury yachts moored in the marina of Puerto Jose Banus on the Costa del Sol in Marbella, Spain.

HMRC and the wealthy: Taxing an exclusive club


Paul Aplin reviews a report into relationships between HMRC and wealthy individuals, with the aim of increasing voluntary tax compliance by members of this exclusive club. 

9th Jul 2021
Former Tax & IT Partner
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My eye was caught recently by some HMRC-commissioned research titled: “How can HMRC encourage more cooperative relationships with the wealthy and their agents?”. This report by IFF Research contains insights from interviews conducted early in 2020 with wealthy individuals and tax agents of wealthy individuals. 

Evidence from other fiscal authorities suggests that a more cooperative relationship could drive up voluntary compliance. The challenge for HMRC is inherent in the complexity of many such individuals’ affairs and the often-limited insight given by their tax returns. 

The main difficulty in creating a more open relationship is that “we would like to understand more about you” can be heard as “we would like to understand more about you so that we can tax you more.”  

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Replies (4)

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By Paul Crowley
09th Jul 2021 15:48

HMRC seem OK with disclosing Furlough details
HM Gov seem happy at disclosing Jimmy Carr as a person complying with the law but somehow bad, but well you know he should volunteer for more tax
Impossible to believe that HMRC and HM Gov can be trusted is a genuine reasonable opinion based on the facts.

But then my richest clients cause me so much more angst, uncharged time, fee resistance that my sympathies fail
Let HMRC list by name those that have unusual foreign assets and complicated arrangements involving offshore trusts Etc

Monthly list 50 people per month starting with those most politically exposed (10) those claiming that they are saving the planet (10) Dumb celebrities (10) Known household business names (10) and Sports persons that invest in films and aeroplanes (10)

Monthly list might trigger people choosing to volunteer some tax to be pushed further down the list.

Thanks (0)
Replying to Paul Crowley:
By AndyC555
12th Jul 2021 09:26

"(10) those claiming that they are saving the planet "

Too true. There are campaigners for "tax justice" and "tax transparency" out there who are awfully secretive about their own tax affairs.

I think if you're one of those campaigners, you should be prepared to publish your own tax returns. After all, you can't have anything to hide, can you?

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By Justin Bryant
09th Jul 2021 16:38

I thought this was the funniest (and possibly most accurate) comment:
“I don’t have any agents or advisers. I don't even have a
financial adviser. I have had in the past, but I just don't trust
them to be honest. They are all just desperate to get their
hands on your pension and all the fees they can get with

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By AndyC555
12th Jul 2021 09:23

I'd be more sympathetic to the "moral" line from HMRC/Government if there was any of this coming back. A friend of mine has lost out on the 4th and 5th SEISS grant because although he dutifully filled in his tax return on-line in mid-January and has evidence to show this as he printed out the tax calc, and although he swears that he pressed the 'submit' button, it turns out he didn't or something went wrong and he didn't find this out until after he applied for the 4th grant. HMRC are adopting a "no appeal", "it's the rules" "tough luck" stance.

No morality or sympathy there. Despite his circumstances falling well within decided Tribunal cases for late filing penalties, there's no equivalent process for the grants and he finds himself up to £15k out of pocket because he thought he'd pressed a button but hadn't.

If 'morality' is to play a part in tax, it has to work both ways. I'm sure readers on here will have clients who similarly have unintentionally fallen foul of tax rules and ended up with unexpected tax bills. Get any sympathy from HMRC?

So, OK if it's "the rules" when it works in favour of HMRC, so should it be "it's the rules" when they work for the client.

Thanks (6)