40th Report - Collecting the right tax from wealthy individuals

Select Committee
Public Accounts Committee HC 827 16 July 2025
Report Status Government responded
Conclusions & Recommendations 27 items (12 recs)
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Government Response (AI assessment · 26 of 27 classified)
Accepted 18
Acknowledged 2
Deferred 6
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Fourtieth report from Session 2024-26 · published 15 Oct 2025
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Recommendations & Conclusions

27 results
2 Recommendation Acknowledged
Review segmenting wealthy customer groups by wealth and complexity to target most significant tax risks.
Recommendation
Even among the wealthy population there are vast disparities in wealth and circumstance, making it likely that more tax is at risk for the wealthiest taxpayers. The population of wealthy taxpayers that HMRC’s wealthy team administers is getting bigger, up … Read more
Government Response Summary
The government agrees with the recommendation and states that progress will be set out in its response, noting it is closely linked to recommendation 6b. No specific actions for this recommendation are detailed.
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3 Conclusion Accepted
Improve HMRC's understanding of wealth and assets held by wealthiest individuals, including all known billionaires.
Conclusion
HMRC cannot identify how much tax is paid by UK billionaires, despite the relatively small number of individuals and significant sums of money involved. HMRC can and must do more to understand and explain the contribution that the very wealthiest … Read more
Government Response Summary
The government states the recommendation is implemented, with the First Permanent Secretary of HMRC having written to the Committee detailing steps to improve understanding of personal wealth and connected entities. HMRC also announced plans to enhance its approach to offshore tax non-compliance.
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4 Conclusion Accepted
Explain how new funding and IT investment will improve HMRC's compliance performance targeting wealthy taxpayers.
Conclusion
There is much more that HMRC can do to improve its work to risk assess and target wealthy people, in particular through the use of data and technology and recruiting wealth management experts. HMRC says targeting its resources on more … Read more
Government Response Summary
The government states the First Permanent Secretary of HMRC has written to the Committee outlining how investment plans aim to improve compliance outcomes. HMRC is currently designing how investment will be deployed and will provide more detailed plans to the Committee by Autumn 2026, building on the Transformation Roadmap published in Summer 2025.
HM Treasury
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5 Conclusion Accepted
Assess HMRC's use of powers, penalties, and prosecutions to tackle wealthy individuals' tax non-compliance.
Conclusion
Too many compliance investigations last too long, with too few leading to penalties and prosecutions. HMRC has different actions it can take against taxpayers who it identifies are at risk of not paying the right tax, including penalties, civil investigations … Read more
Government Response Summary
The government has announced an ambition to increase positive charging decisions for harmful fraud by 20% to 600 per year by 2029-30, expecting a corresponding increase in criminal investigations of wealthy individuals. HMRC has already significantly increased investigations of wealthy individuals and clarifies that prosecution decisions rest with independent authorities.
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6 Conclusion Accepted
HMRC lacks sufficient clarity on wealthy individuals' tax payments and avoidance, with overly optimistic tax gap estimates.
Conclusion
It is not sufficiently clear how much tax is paid, and how much tax is avoided by the very wealthy, which restricts HMRC’s ability to reassure the public that it administers the system fairly. Fairness is at the heart of … Read more
Government Response Summary
The government agrees and states HMRC is scoping work to better understand and more accurately capture the contribution of wealthy individuals and their controlled entities to the overall tax gap. HMRC will write to the Committee in Autumn 2026 with an update on progress in improving the wealthy tax gap estimate.
HM Treasury
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1 Conclusion Accepted
Committee reviewed evidence from HMRC on collecting the right tax from wealthy individuals.
Conclusion
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Revenue and Customs (HMRC) on collecting the right tax from wealthy individuals.1
Government Response Summary
The government committed to HMRC publishing its plan in spring 2026, detailing how it will improve compliance among wealthy individuals and setting out specific timelines and outcomes for each objective.
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7 Recommendation Accepted
HMRC secured funding to increase wealthy team by 400 staff, targeting £500m additional yield.
Recommendation
We asked HMRC about its ambitions and priorities for ensuring that wealthy individuals pay all the taxes that they should. HMRC told us that it has significant opportunity to do more and that is working with Ministers to secure the … Read more
Government Response Summary
HMRC will set out what investments will help improve a range of compliance outcomes for the wealthy customer population by Autumn 2026, after further design work on how the investment it has received through the Spending Review will be deployed. At Spring Statement 2025, the government announced plans to tackle offshore tax non‑compliance by the wealthy. The government published its Transformation Roadmap in Summer 2025 which sets out how HMRC will use investment to improve performance.
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8 Recommendation Accepted
HMRC identified opportunities to improve wealthy team effectiveness through enhanced data exchange and global collaboration.
Recommendation
HMRC told us that it wants to ensure that its wealthy team has the enablers and capabilities it needs to be more effective and productive in its work. It said that it is a constant endeavour for it to collect … Read more
Government Response Summary
HMRC will set out what investments will help improve a range of compliance outcomes for the wealthy customer population by Autumn 2026, after further design work on how the investment it has received through the Spending Review will be deployed. At Spring Statement 2025, the government announced plans to tackle offshore tax non‑compliance by the wealthy. The government published its Transformation Roadmap in Summer 2025 which sets out how HMRC will use investment to improve performance.
HM Treasury
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9 Recommendation Accepted
HMRC aims to reduce the overall tax gap, aligning with OBR's £7.5 billion forecast.
Recommendation
HMRC told us that its ultimate objective is to reduce the overall tax gap, and it hopes the increase in its compliance activity will reduce the tax gap over the next few years.13 The Office for Budget Responsibility (OBR) has … Read more
Government Response Summary
HMRC will publish its plan in Spring 2026 on how it will improve compliance by the wealthy population and set out timelines and outcomes for each objective, as part of its Transformation Roadmap published in July 2025.
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10 Recommendation Accepted
HMRC lacks specific focus and risk assessment for the very wealthiest individuals despite their heightened risk.
Recommendation
Around 29,000 wealthy individuals had incomes of at least £1 million in 2023–24 and were liable for around £34 billion of Income Tax in total. Within this population are taxpayers with very high incomes and wealth: around 10,000 taxpayers have … Read more
Government Response Summary
HMRC will undertake further analysis to enhance its understanding of how different levels of wealth and complexity impact risk in the wealthy population, to improve its identification and targeting of risk. Target implementation date: Autumn 2026.
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11 Recommendation Accepted
HMRC acknowledges the need to review its wealthy population definition and improve segmentation.
Recommendation
We asked HMRC whether it would be useful if it segmented the population of wealthy individuals to focus on the very wealthiest taxpayers, and whether it saw different risks from these wealthiest individuals.16 HMRC observed that people’s propensity for risk … Read more
Government Response Summary
HMRC will undertake further analysis to enhance its understanding of how different levels of wealth and complexity impact risk in the wealthy population, to improve its identification and targeting of risk. Target implementation date: Autumn 2026.
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12 Conclusion Accepted
Only 2% of wealthy individuals are assigned CCMs, highlighting need for risk model review.
Conclusion
Customer Compliance Managers (CCMs) within the wealthy team provide a single point of contact for the taxpayer and their agent and develop an in-depth understanding of a wealthy individual’s financial affairs to identify risks and support the taxpayer to be … Read more
Government Response Summary
HMRC commits to ensuring all identified billionaires with a UK tax footprint have an allocated Customer Compliance Manager (CCM), with new allocations by summer 2026, and will provide assurance of completion by autumn 2026.
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13 Conclusion
HMRC's strategic risk assessment omits explicit non-compliance risks posed by tax agents.
Conclusion
HMRC highlighted that over 70% of the wealthy population has agents, and this increases to 90% for the wealthiest individuals.21 We asked HMRC about its plans to tackle unscrupulous tax agents. HMRC told us that its focus is on the … Read more
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14 Recommendation Accepted
HMRC lacks firm plans or timescales for collecting comprehensive information from wealthy individuals.
Recommendation
HMRC has an ambition to collect more information from wealthy individuals with more complex affairs, in line with international best practice. However, HMRC has set no firm plans or timescales.25 We asked HMRC about its progress in collecting more information … Read more
Government Response Summary
HMRC will request more data on assets and wealth from those taxpayers it suspects have high or very high levels of wealth and provide a further update in Autumn 2026 on any progress made on acquiring additional data sets. HMRC will set out its progress on this to the Committee in Autumn 2026.
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15 Recommendation Accepted
HMRC cannot identify the number of billionaires paying UK tax due to legislative limitations.
Recommendation
HMRC could not tell us how many billionaires pay tax in the United Kingdom and explained that income and chargeable gains determine whether someone pays tax, not whether they are a billionaire. UK tax legislation does not require taxpayers to … Read more
Government Response Summary
HMRC will continue to enhance its understanding of billionaires with a UK tax footprint and provide assurance that all billionaires with a UK tax footprint in the wealthy population have an allocated Customer Compliance Manager (CCM). CCMs are senior tax professionals who provide extra scrutiny of individuals who have complex tax affairs and support customers to get their tax right first time. Customers who are newly allocated a CCM in the next update will be informed by summer 2026. Assurance will be provided to the Committee that this has been completed by autumn 2026. It will also use various data sources to estimate the wealth of individuals and understand who the wealthiest individuals are for UK tax purposes.
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16 Recommendation Accepted
HMRC has not linked internal data with external rich lists to identify wealthy UK taxpayers.
Recommendation
The Sunday Times Rich List 2025 listed 156 billionaires, compared with 165 last year. We asked HMRC if it has ever tried to link the Sunday Times Rich List with its own records to estimate how many billionaires on the … Read more
Government Response Summary
HMRC will continue to enhance its understanding of billionaires with a UK tax footprint and provide assurance that all billionaires with a UK tax footprint in the wealthy population have an allocated Customer Compliance Manager (CCM). CCMs are senior tax professionals who provide extra scrutiny of individuals who have complex tax affairs and support customers to get their tax right first time. Customers who are newly allocated a CCM in the next update will be informed by summer 2026. Assurance will be provided to the Committee that this has been completed by autumn 2026. It will also use various data sources to estimate the wealth of individuals and understand who the wealthiest individuals are for UK tax purposes.
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17 Recommendation Accepted
Vast wealth disparities exist within HMRC's wealthy customer group, requiring improved understanding of billionaires.
Recommendation
The NAO’s report illustrates the vast difference in levels of wealth in HMRC’s wealthy customer group. For example, a billionaire could have 100 times more wealth than someone who fits the descriptor of a “high net worth individual”, and 500 … Read more
Government Response Summary
HMRC will undertake further analysis to enhance its understanding of how different levels of wealth and complexity impact risk in the wealthy population, with target implementation in Autumn 2026.
HM Treasury
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18 Conclusion Deferred
HMRC's wealthy team has increased compliance yield by preventing non-compliance and targeting complex investigations.
Conclusion
The wealthy team has been generating more of its compliance yield from activities that promote compliance or prevent non-compliance, such as legislative changes, educating agents, and digital prompts within tax software, creating less need for HMRC to open a compliance … Read more
Government Response Summary
The government agrees and states HMRC will publish a plan by Spring 2026 detailing how it will improve compliance by the wealthy population and outlining timelines and outcomes.
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19 Conclusion Deferred
Nearly half of wealthy team compliance investigations close with no yielded tax.
Conclusion
A significant proportion of the wealthy team’s compliance investigations close with no yield — 46% in 2023–24, though down from 63% in 2022–23.35 We asked HMRC why nearly half of investigations resulted in no yield at all. HMRC explained that … Read more
Government Response Summary
The government agrees and states that HMRC is currently designing how its investment will be deployed, and will provide more detail to the Committee by Autumn 2026 on how these investments will improve compliance outcomes for the wealthy.
HM Treasury
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20 Recommendation Accepted
HMRC plans significant investments in data, AI, and expertise to improve compliance targeting.
Recommendation
HMRC told us that the investment it secured as part of its recent funding settlement will help improve its data and understanding of the risks and better target its compliance activity so that, when it opens a case, it has … Read more
Government Response Summary
HMRC will set out what investments will help improve a range of compliance outcomes for the wealthy customer population by Autumn 2026, after further design work on how the investment it has received through the Spending Review will be deployed. At Spring Statement 2025, the government announced plans to tackle offshore tax non‑compliance by the wealthy. The government published its Transformation Roadmap in Summer 2025 which sets out how HMRC will use investment to improve performance.
HM Treasury
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21 Conclusion Deferred
Duration of wealthy individual compliance investigations remains lengthy, particularly for high-value cases.
Conclusion
In 2023–24, HMRC initiated compliance investigations in the majority of instances where it identified a risk of non-compliance.39 The average time it took HMRC to close an investigation increased each year over the period from 2018–19 to 2022–23 to a … Read more
Government Response Summary
The government agrees with the item but states HMRC will report back on it once its assessment of powers and sanctions is completed by Autumn 2026, deferring any specific action until then.
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22 Conclusion Deferred
Lengthy complex investigations for wealthy individuals pose a potential flight risk.
Conclusion
We asked HMRC about the risk of people under investigation leaving the country, given that some investigations take so long to complete. HMRC conceded that taking too long to complete its complex investigations could present a flight risk but said … Read more
Government Response Summary
The government agrees and will report back on the recommendation by Autumn 2026, pending completion of HMRC's assessment of its application of powers and sanctions.
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23 Recommendation Accepted
HMRC has issued fewer penalties to wealthy taxpayers, with fluctuating criminal prosecution numbers.
Recommendation
HMRC has issued fewer penalties to wealthy taxpayers in recent years, and criminal prosecutions of wealthy individuals have also declined. In 2023–24, HMRC issued 456 penalties to wealthy individuals, totalling 37 Qq 20, 87-88, 90 38 Q 105 39 C&AG’s … Read more
Government Response Summary
HMRC will assess its use of powers to tackle non-compliance by the wealthy, in particular whether it makes sufficient use of available sanctions, and report back once the assessment has been completed. Target implementation date is Autumn 2026.
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24 Conclusion Accepted
HMRC has failed to issue penalties to enablers of wealthy tax evasion.
Conclusion
HMRC reserves criminal investigations for where it needs to send a strong deterrent message or where only a criminal sanction is appropriate.45 HMRC told us that deterrence works primarily through media and social media so focusing on the most severe … Read more
Government Response Summary
The government agrees and states it will increase positive charging decisions for harmful fraud by 20% to 600 per year by 2029-30, with investigations including fraud facilitated by large corporations and individuals enabling offshore tax evasion, confirming the recommendation is implemented.
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25 Conclusion Acknowledged
HMRC committed to increasing transparency on tax contributions from wealthy taxpayers.
Conclusion
We stressed to HMRC the importance of its role in ensuring it can assure ordinary taxpayers that everybody is paying their fair share of tax. HMRC told us that fairness is right at the heart of its charter, and that … Read more
Government Response Summary
The government agrees with the item, stating HMRC will review its data and modelling on wealthy individuals' assets and will explore options for extending the range of data published to improve transparency by Autumn 2026.
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26 Conclusion Deferred
HMRC published new estimates for wealthy and offshore tax gaps, totalling £300 million.
Conclusion
HMRC is one of few tax administrations that publishes an annual estimate of the amount of tax revenue lost to wealthy individuals. It estimated this wealthy tax gap to be £1.9 billion in 2022–23, or 0.2% of all taxes owed. … Read more
Government Response Summary
The government agrees with the item and states HMRC is scoping work to better understand the contribution of wealthy individuals to the tax gap, reviewing current estimates, and will provide an update on progress by Autumn 2026.
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27 Conclusion Deferred
HMRC's offshore tax gap estimate is partial, understating significant non-compliance risks.
Conclusion
We asked HMRC about its confidence in the accuracy of these estimates, observing specifically that the offshore tax gap seems low given that UK taxpayers held £849 billion in foreign accounts in 2019 and reportedly £570 billion in tax havens. … Read more
Government Response Summary
The government agrees with the item and states HMRC is scoping work to better understand the contribution of wealthy individuals to the tax gap, reviewing current estimates, and will provide an update on progress by Autumn 2026.
HM Treasury
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