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HMRC cracks down on holiday home dodgers

10-Nov-2011

A team of tax investigators at HMRC is targeting rich Britons with overseas properties who are dodging tax in a new crackdown that could net the Treasury more than £500m. Nick Huber reports.

The 200-strong team of investigators and specialists in the “affluent unit” will use software to trawl publicly-available information to identify individuals who own property abroad and could owe income tax from rental income or capital gains tax from property sales, HMRC said earlier this week.

HMRC will use “risk assessment” tools to highlight people who do not appear able legitimately to afford the property, as well as those who do not appear to be declaring the correct income and gains from the property.

HMRC investigators will also ask holiday home owners how they funded the property and whether it has been declared as an income source. The unit is targeting people with assets between £2.5m and £20m and people who should be paying the 50 pence rate of income tax.

HMRC reckons that the new unit could claw back £560m in taxes by 2014-15. A spokesperson for the government department said that its property unit would follow the ‘model’ of HMRC’s High Net Worth Unit, which was created in 2009 to deal with the personal tax affairs of the UK’s wealthiest individuals and brought in £85m in tax receipts for 2009-10 and £162m for 2010-11.

The focus on overseas properties is part of a bigger clampdown on tax evasion. Last year the government allocated £917m to reduce the money lost to tax evasion.

Exchequer secretary to the Treasury, David Gauke, said in a statement: “With HMRC’s increased capability and expertise, and its increasing success in tackling evasion both at home and offshore, the message is clear: there is no hiding place for tax cheats.”

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