Rayner scandal piles pressure on HMRC as tax surveillance force swells
HMRC has increased the number of staff trained to physically monitor suspected tax evaders, as pressure mounts over Angela Rayner’s £40,000 stamp duty scandal.
Official figures, obtained via Freedom of Information (FOI) and shared with City PM, show that 337 staff are now trained in covert surveillance, up from 171 people two years ago, in a programme that cost £580,000 last year.
HMRC guidance states that the powers for those trained up on surveillance allow for “drive-bys” of properties and test purchases to gather evidence of fraud.
What’s more, a further 196 employees were given criminal foundation training, while more than 2,000 were trained in personal safety.
The tax agency has been expanding its criminal investigation powers as part of Labour’s ‘Close the Tax Gap’ initiative, including conducting more dawn raids.
The new data expansion comes after Rayner quit as deputy prime minister and deputy Labour leader, following revelations she underpaid tax when buying an £800,000 Hove flat.
Rayner has admitted she should have paid the higher rate for seaside homes due to complex trust arrangements around her family home, leaving her liable for an extra £40,000 plus potential penalties of around 20 per cent.
“The resignation of the deputy prime minister underlines the complexity of Britain’s tax law and the serious consequences of getting it wrong”, said Kenny MacAulay, chief executive of Acting Office, a software platform for accounting practices. “It’s encouraging to see HMRC ramp up its core capabilities to identify and enforce the rule and hold individuals and businesses to account.”
Political fallout
Ethics adviser Sir Laurie Magnus found Rayner acted with “integrity”, but failed to seek proper specialist advice despite being warned to do so.
It was reported that HMRC is now investigating her case, with tax lawyers suggesting she faces an additional bill of around £8,000 in penalties for a “careless” error.
Rayner’s resignation triggered a sweeping cabinet reshuffle by Keir Starmer, but also raised questions about whether HMRC’s current systems are fit for purpose.
Tax experts pointed to a recent glitch in its digital capital gains tax service that could leave thousands of taxpayers underpaying.
David Wright, tech officer of the Association of Taxation Technicians, said mistakes were “inevitable,” noting that HMRC may impose interest charges – currently running at eight per cent – and fines of up to 30 per cent on underpaid CGT.
What’s more, concerns over readiness for Making Tax Digital, which will soon pull 800,000 more into HMRC’s online regime.
Craig Ogilvie, HMRC’s director of MTD, has urged accountants to act now: “With April 2026 on the horizon, agents should be reviewing if any of their clients have income over £50,000”.
“We urge those who meet the criteria to join our testing programme on GOV.UK now to help shape the final service”.
Combining increased surveillance with patchy digital rollouts could risk alienating taxpayers and undermining confidence in the system.
HMRC appears to be arming itself on two fronts: building a bigger surveillance force on the ground, while attempting to digitise Britain’s tax base.
However, with Rayner’s case dominating headlines, the department’s ability to enforce rules consistently, from Westminster to the high street, faces renewed scrutiny.
HMRC was approached for comment.