The Independent has reported:
A Finance Team set up by HM Revenue and Customs to target wealthy fund managers and investment bankers has brought in £39 million since it started in September 2012, while the number of investigations is up by a quarter in the last year.
The average number of investigations opened went up from four per month in the first six months of the unit's existence to five per month in the past year, according to data collected by PFP, a firm that insures businesses against the costs of HMRC investigations.
The Finance Team is part of HRMC's High Net Worth Unit, which targets high earners in private equity, investment banks, hedge funds and other funds.
Now I know this is all based on a press release issued by an organisation that is trying to sell fear of tax investigations, but as a PR exercise it is a disaster precisely because what it says is not that HMRC have increased the number of investigations by 25%, which is the message they are trying to impart, but that there are pathetically few such investigations.
I know there are many more investigations of many more types than are covered here, but the whole point of HMRC's advertising campaigns is that they want you to think that they know what people are up to.
And apparently knowing that suggests that there are just 60 people a year worth investigating. Even if we only assume they are looking at higher rate tax payers that is still only about a 0.002% chance of being investigated.
First, those odds will scare no one.
Second, with an average yield exceeding £300,000 it is obvious that this work is paying.
Why, oh why, in that case the lack of resources to do more when the issue is so big?
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I’m not sure where you get that 0.002% chance from.
I do know that the HNW Unit look only at the very wealthy and this Finance Team seems to have been set up to target fund managers and investment bankers within that group. If there are 60 enquiries a year and if that really did represent a 0.002% chance of being investigated it would suggest there were 3,000,000 fund mangers and investment bankers.
Do you really think there are that many?
That is not all the U it is looking at as I understand it
Well, according to an HMRC press release I’ve seen, the HNWU as a whole deals with around 6,000 people so it seems a bit odd that a unit within the HNWU is now dealing with 3,000,000 people.
There certainly aren’t that many Fund Managers and Investment Bankers.
That’s probably the entire number of 40%+ tax payers. Being looked at by the HNWU? Yielding an average £300,000 settlement?
These figures just don’t make any sense.
Where did you gain your understanding? Is there a lead or link you can give us?
But this was not the HNWU
And there are a lot more than 6,000 HNWIs
Richard, you’ve got your maths wrong. Sometimes it’s best just to admit a mistake and move on, instead of ducking it by alluding to an ‘understanding’ that you cannot reference or support.
60 might be a very small number, but it’s not 0.002% of anything relevant. The quote you provide clearly states that this function is part of the HNWU, and outlines it’s particular remit (target group) within that unit. Whether there are more than 6,000 HNW individuals is irrelevant, it’s about how many people this unit is supposed to cover.. and that number isn’t 3 million.
You made a mistake and you didn’t spot it because it suited your pre-existing beliefs. It happens. Deal with it and move on.
I accept you hold your opinion
A whole 1 extra investigation per month in 3 years. Waoh!
Hardly reason to crack open the champagne, is it.
I believe this is a deliberate act on the part of government to keep the prying eyes of HMRC away from their friends in the square mile.