International law firm, Pinsent Masons, said the UK’s tax office has intensified its clampdown on suspected tax avoidance among newly successful entrepreneurs, professionals and celebrities, monitoring them before they reach the high net worth individual benchmark.
The authority’s ‘Rising Stars’ team will investigate individuals who have a net worth of at least £15m and who have the potential to reach £20m within the next five years, meeting the wealth criteria for the high net worth unit.
“Efficient scrutiny”
“Creating this team means that HMRC has left virtually no part of the million plus market escaping scrutiny,” said Fiona Fernie, partner and head of tax investigations at Pinsent Masons.
“Now the Revenue has a system in place to monitor those with fast-growing wealth well before they reach necessary threshold for scrutiny by the HNW unit. Monitoring these taxpayers from an early stage is likely to result in more efficient scrutiny as they move into a higher wealth bracket.”
Those rising quickly through the ranks at investment banks and other financial services firms, as well as young sports-stars and celebrities are likely to be monitored using the body’s new system.
This is the latest in a number of measures HMRC has introduced to crack down on suspected tax avoidance among very wealthy taxpayers.
“Under the spotlight”
HMRC now uses technology which helps pinpoint groups where tax avoidance may be an issue, drawing on data from various sources, including banks, local councils and social media.
Fernie said: “HMRC is now drawing on wider range of information to identify targets for investigation; those with complex tax affairs and offshore wealth are increasingly likely to come under the spotlight as a result.”
In October, an automatic information exchange agreement was signed by more than 50 countries.
