Millionaires face tax crackdown

Millionaires face tax crackdown

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Danny AlexanderDanny Alexander says HM Revenue and Customs’ staff will examine tax “anomalies”

Individuals with assets of more than £1m face a new crackdown on tax avoidance, Lib Dem Treasury Chief Secretary Danny Alexander has revealed.

This will see 200,000 more people targeted by the Affluence Unit (AU) of HM Revenue and Customs.

Earlier, Lib Dem leader Nick Clegg said at his party’s conference that it wanted more tax on unearned wealth.

Mr Alexander told the Mail on Sunday the wealthiest “did best in the boom years” and so should “pay more now”.

Officials would “sniff out” those not paying a fair share of tax, he added.

“The measure will apply to people with homes and assets of more than £1m.”

The AU which has had its staff increased from 200 to 300, would cross-reference files and records to spot signs of avoidance, he said.

“They will look at anomalies and sniff out any problems.”

The unit was first set up to study the affairs of the 300,000 taxpayers with assets and property of more than £2.5m.

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Analysis




Liberal Democrats have long emphasised their enthusiasm for making sure wealthy individuals pay their fair share of tax.

At their conference last year Danny Alexander announced a special team to examine the affairs of the most affluent.

Now he has revealed HM Revenue and Customs is to add an extra 100 inspectors to the 200 already recruited, and said the scope of their inquiries would be broadened – targeting those worth more than £1m, not £2.5m as was previously the case.

Several Premier league stars have already been forced to pay extra tax, he revealed. Mr Alexander will also write to the BBC’s new director general George Entwistle to say its employees should be paid openly and transparently.​


Tax investigations

A new drive by the coalition government to scrutinise the tax affairs of the affluent will also include separate moves to stop high-earning BBC personalities from using tax avoidance schemes and fines for footballers who do not pay the correct tax amounts.

“I am not ascribing any particular moral characteristics to footballers,” Mr Alexander added. “But experts will identify warning signs, make sure their tax affairs are in order and approach the individual and ‘have a conversation’ if they aren’t.”

The Lib Dem Transport spokesman, Julian Huppert, said the move was well targeted.

“It’s something we’ve felt for a long time, that we want to take people who have wealth, particularly unearned wealth. They currently don’t contribute as much towards taxation as they probably ought to, and particularly now when we do have problems finding the money, we have to deal with the legacy that was left.

“Taking some of that money through something like the mansion tax is an excellent thing to do.”

Mr Clegg, the Lib Dem leader, said during a speech at his party’s conference in Brighton on Saturday that it was “just wrong that people on low and middle incomes who work hard and play by the rules are taxed so much, while Russian oligarchs pay the same council tax you do on a family home”.

“Liberal Democrats are fighting to change that – lower taxes on work, and more tax on unearned wealth. I want to reward people who put in a proper shift, not those who sit on a fortune. People for whom a bonus means a few extra quid at Christmas, not a million pound windfall.”

The AU operates in addition to the High Net Worth Unit (HNWU), which was set up in 2009 to review the personal tax affairs of the 5,000 wealthiest people in the UK, each with a total wealth of at least £20m.

HMRC has also already launched the Offshore Co-Ordination Unit (OCU) which looks to “fully exploit the increasing amount of offshore information at HMRC’s disposal, including bank account data”.

In October last year, HMRC announced that it was seeking to recover £7bn per annum of tax lost through evasion and avoidance over the next four years.

The HNWU collected £162m from their enquiry work in 2010/11.