LONDON — The rich paid £1 billion ($1.25 billion) less tax in 2015 compared with five years earlier, and MPs want to know why.
The UK parliament’s public accounts committee asked HM Revenue & Customs to explain why high-net-worth individuals paid 20% less tax, while the overall income tax haul increased by £23 billion, or 9%, over the same five-year period.
“The lack of transparency leaves the Department open to the perception that, in its dealings with taxpayers, there is one rule for the rich and another for everyone else,” the committee said in a report published on Friday.
The MPs also voiced concern about the potential for preferential treatment to be given to the wealthy by HMRC, noting that they are given a personal “customer relationship manager” and that meetings and calls with them aren’t recorded.
“It should change the name of its customer relationship managers to something that better describes what they do, and does not suggest an overly close and inappropriate service to the wealthy,” the committee said.
HMRC said in a statement reported by the Financial Times that “there is absolutely no special treatment for the wealthy, and in fact we give them additional scrutiny, with one-to-one marking by HMRC’s specialist tax collectors, to ensure that they pay everything they owe, just like the rest of us do.”
“The NAO commends this approach as being in line with international best practice and confirms that HMRC has increased the amount of tax we collect or secure from the very wealthy that would have otherwise gone unpaid,” HMRC said.
MPs also queried HMRC’s effectiveness at bringing tax fraudsters to justice and the strength of the office’s deterrent powers.
“Since 2012, HMRC has issued 850 penalties totalling £9 million to high net worth individuals; an average penalty of £10,500,” the committee said.
“That seems too small an amount to change the behaviour of multi-millionaires, particularly as avoidance is moving from off the peg marketed tax avoidance schemes to complex bespoke schemes, in effect from a high street equivalent of off the rail Primark or Next to made to measure Savile Row.”
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