Heightened scrutiny of wealthy individuals by HM Revenue & Customs saw the taxman recoup a record £1.9bn ($2.9bn, €2.09bn) in 2018/19.
This compares with investigations into high net worths generating £1.2bn the year before, according to data obtained by law firm Pinsent Masons.
Steven Porter, a tax law expert at Pinsent Masons, attributed the 58% rise to global data sharing agreements, which meant HMRC now has much more data to work with.
Global transparency
The common reporting standard (CRS) means that over 100 countries share data with HMRC.
In 2018, the tax authority received information about 5.67 million offshore accounts held by around three million UK residents.
On top of that, investigations into data leaks, such as the Panama Papers, have also led to a rise in income.
To date, the Panama Papers have brought in £190m, with a further 215 investigations still ongoing.
Every corner of the world
“HMRC’s data-led approach is proving incredibly effective – the taxman’s reach has never been longer than it is now,” Porter said.
“HMRC can ask for data on taxpayers from every tax haven and almost every country in the world.
“The surge in yield from investigations may also reflect HMRC’s multi-faceted approach to compliance amongst wealthy individuals,” he added.
“Data is used to cross-check returns and sometimes letters are simultaneously pumped out asking individuals to confirm information they don’t need to confirm – mistakes can easily be made which can leave taxpayers exposed to investigations,” Porter said.
HMRC’s ‘Connect’ database is also helping in its efforts to gather information from an increasingly wide range of sources.
It is able to cross reference up to 22 billion lines of data; including tax returns, property and financial data.
“HMRC’s willingness to not only investigate, but also enforce and prosecute, shows its continued use of the stick over the carrot when pursuing wealthy individuals,” Porter said.
