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The degree of tax evasion and evasion by wealthy people may be much higher than the opinion of the UK tax authority has found a report from the National Audit Office.
Wealthy people, determined by HM income and customs like those who either earn more than 200,000 or year or with more than £ 2m wealth, pays £ 119 billion in personal taxes in 2023-24, an average of £ 140,000 per person. The amount represented 25 percent of personal tax bills in the UK.
But the complexity of the jobs of the richest people made it harder for HMRC to identify the tax they forced and presented the opportunity to deliberately to avoid paying the right amount, Nao warned in a Friday report.
The report said that in 2022-23 the HMRC rating on the “Tax Trench” between this group-the change between the amount of tax to be paid and what was actually paid-was only 1.9bn £.
However, he discovered that the HMRC had subsequently doubled the “annual compliance yield” by individuals wealthy from £ 2.2bn in 2019-20 to 5.2bn £ 2023-24. The term refers to tax revenue HMRC has collected because of its work to ensure compliance.
The figures showed that HMRC had collected more taxes than previously believed possible, according to the report.
The Nao report said: “This raises the possibility that the basic levels of disrespect between the rich population may be much greater than previously thought.”
Despite the growth of the population of rich people, the number of prosecutions on unpaid taxes and HMRC fines issued for wealthy people had dropped in recent years, the report added.
Gareth Davies, the head of the Nao, said HMRC deserved loans for the huge increase in additional tax revenue, her compliance work had brought from wealthy taxpayers.
But he added: “This may show that the levels of disrespect are higher than previously estimated. HMRC should also seek to provide greater transparency to give greater confidence to the public than all taxpayers to contribute to their right.”
The report also addressed issues about tax evasion and avoidance from people rich in wealth abroad, which Nao said HMRC had recognized as a major danger.
The report said HMRC public estimate that £ 300m in tax revenue were lost through this road in 2018-19, the latest year available, did not fully catch the amount of possible tax lost.
The report noted that the UK tax residents held £ 849BN in the offshore account in 2019. He added: “Inside, HMRC has identified a much greater amount of risk tax from all forms of offshore disregard, but does not publish this figure.”
Meanwhile, the tax office had only set a “limited strategy” to address tax evasion and avoiding wealthy people, Nao said.
In the fall budget, the government provided funds for an additional compliance staff with 5,500 HMRC over the next five years, the report noted. However, she said the tax office did not yet have a clear plan to ensure that the team gets the capable staff it needed.
Among some recommendations, the report called for HMRC to develop a “clear strategic vision and plan” to solve rich disregard and ensure “sufficient transparency to give greater confidence” to the public.
Caitlin Boswell, chief of law and policies at Tax Justice UK, a campaign group, noted the growing gap between the tax owned by the richest and what was actually paid.
“This is because of things such as secret offshore tax paradise used to promote assets for which the tax authority has no supervision,” she said.
It also blamed the problem for the rich use of people of tax agents to exploit “gaps in the system”.
HMRC said it was her duty to ensure that everyone paid the right tax under the law, “regardless of property or status”.
She added: “The government is giving the most ambitious package to close the tax gap and bring an additional £ 7.5 billion for public services annually by 2029-30.”
