Weekend Read: HMRC launches more than 1,000 new probes every single day in attempt to recoup lost pandemic revenue
HMRC has launched 137,000 tax investigations in the six months to December 2021, up 9 per cent from the 126,000 investigations in the same period last year, according to new data shared with City PM today.
This amounts to the Revenue opening 1,062 tax investigations per day.
HMRC is ramping up its compliance activity as it looks to make up for revenue lost during the pandemic, tax investigation insurance firm PfP said, which shared the findings.
HMRC had until recently been exercising a considerable degree of forbearance towards individuals and businesses falling behind on their tax affairs.
Individuals under investigation will see their tax affairs heavily scrutinised, with in-person visits and property searches returning as social distancing measures are lifted.
HMRC will now be allocating more resources to investigations as staff previously working on pandemic programmes such as furlough are freed up for other duties, the firm stressed.
“This jump in tax investigations comes as the Government seeks to fill the black hole left in the public finances by the pandemic,” said Kevin Igoe, Managing Director at PfP.
“Opening over 1,000 new tax investigations per day shows HMRC has really picked up the pace.”
Kevin Igoe, Managing Director at PfP
“The Revenue clearly sees increased compliance activity as one way to balance the books,” Igoe told City PM
HMRC will be looking to make up for the loss to the taxpayer from pandemic-related fraud and error, which the Public Accounts Committee recently estimated to amount to £15bn.
The taxman is also likely to push for harsher penalties, as excuses for late payment are increasingly treated with less sympathy than when the pandemic was in full swing. In a further sign of a more aggressive approach from the Revenue, late payment interest increased this month from 2.75 per cent to 3 per cent.