Despite the unexpected result of last week’s election, which saw David Cameron’s Conservatives win a majority government, the company’s tax team says the UK tax office is likely to build on the 29% increase in tax investigations into internationally mobile high earners see over the last year.
The Revenue’s specialist Personal Tax International compliance unit investigated 764 cases in the last twelve months, up from 593 in 2013/14 and 438 in 2012/13, according to the company.
It said the increase in investigations has been driven by a clamp down on individuals who the Revenue believes are wrongly claiming to be non-resident and non-domiciled in the UK, such as British citizens who now live abroad.
Intensify
Adam Craggs, partner and head of RPC’s tax disputes, said: “HMRC’s scrutiny of wealthy individuals’ residence arrangements is intensifying, as that segment of internationally mobile high earners is increasingly viewed as a rich seam for tax enquiries.
"Scrutiny from HMRC is likely to intensify in the short to medium term"
“We expect HMRC to continue to focus on such individuals, and scrutiny from HMRC is likely to intensify in the short to medium term.
“All parties have an increase in tax take from investigations as part of their plans for closing the deficit – so high net worth individuals shouldn’t expect any slackening of activity by HMRC over the next year.
He added that it is important to ensure that all relevant evidence is available if an individual is to successfully withstand a challenge from HMRC on their domiciliary or residential status, given the complexity of such cases.
Headquartered in London, RPC is a commercial law firm comprising 77 equity partners and 250 lawyers. It also has offices in Hong Kong, Singapore, and Bristol.
