High earners in the UK are facing a sharp rise in tax investigations as HM Revenue & Customs (HMRC) intensifies scrutiny of the wealthiest Britons following a record-breaking year for compliance revenue.
A Freedom of Information request by accountancy firm Pinsent Masons has revealed that HMRC’s wealthy and mid-sized business compliance directorate raised more than £1.5 billion from investigations in 2024 — double the figure from the previous year. The directorate focuses on individuals earning over £200,000 annually or holding assets exceeding £2 million.
The unprecedented returns have prompted HMRC to bolster its compliance efforts, with 400 new specialist compliance officers due to be recruited over the next four years. The Treasury expects the expanded workforce to generate an additional £500 million in tax revenue by 2030.
“HMRC has been set some very hard targets for extra tax collection by the chancellor,” said Ian Robotham of Pinsent Masons. “It is hard to see how they can achieve those targets without a sharp rise in tax investigations into the wealthy.”
The tax authority has been ramping up its use of artificial intelligence and data analytics to root out tax avoidance and non-compliance. Central to its efforts is the Connect system, a powerful data-matching tool that cross-references individuals’ and businesses’ tax returns with financial information from banks, land registries, social media, and overseas jurisdictions.
Through global agreements like the OECD’s Common Reporting Standard, HMRC now receives automatic notifications when UK residents move money to foreign accounts in participating countries.
Investigations can be triggered by anomalies in tax returns, tip-offs, or risk assessments. Once a review begins, high-net-worth individuals may be asked to provide detailed documentation, including personal and business bank statements, trust deeds, and offshore account details. They may also face interviews with compliance officers.
Penalties can vary depending on the nature of the breach — from simple carelessness to deliberate concealment — and can exceed 100 per cent of the tax owed. In serious cases, criminal prosecution is possible.
One of the highest-profile examples of HMRC’s tougher approach came in 2023 when Bernie Ecclestone, the former Formula One chief, pleaded guilty to fraud after failing to declare more than £400 million in an offshore trust. He avoided jail but paid £652.6 million in tax, interest, and penalties.
The total amount collected by HMRC from the wealthiest taxpayers — those earning over £200,000 or with significant assets — hit £5.2 billion last year, up from £4 billion in 2023. HMRC estimates that this group still underpays tax by as much as £2.1 billion annually.
In a statement, HMRC said: “It’s our duty to ensure everyone pays the right tax under the law, regardless of wealth or status. The government is delivering the most ambitious ever package to close the tax gap and bring in an extra £7.5 billion for public services per year by 2029 to 2030.”
The growing pressure on high earners to comply with an increasingly aggressive tax regime comes as the government looks to close funding gaps without further raising headline tax rates. With the wealthy firmly in the crosshairs, advisers are warning clients to ensure their financial affairs are watertight — or risk being next in line.
