HMRC using snitches in tax crackdown with UK households facing £94,000 bills

People snooping to HMRC have helped the taxman rake in £285m extra in unpaid tax. HMRC raked in an extra £31m from taxpayers it suspected of underpaying inheritance tax in 2023-24 compared to the previous year, according to official data revealed in a Freedom of Information request.

It marks a 14 per cent rise with the average amount of extra tax collected from each investigation rose to £94,273 in 2023-24, up from £79,315 in 2022-23. Neela Chauhan, of accountancy firm UHY Hacker Young, said in a statement to the Telegraph newspaper this weekend: “Taxpayers really resent paying tax on their inheritance – so many try to avoid paying it.

“But with inheritance tax being such a major earner for HM Treasury, there’s a strong incentive for HMRC to keep challenging inheritance tax submissions that it’s suspicious of. HMRC’s focus on inheritance tax is yielding a greater compliance take from fewer investigations – a clear sign that their efforts to clamp down on tax evasion are working.

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“The Government’s decision to dramatically increase the range of assets and estates hit by inheritance tax in the Budget could spur a new wave of evasion and avoidance of this tax – creating far more investigations for HMRC.”

HMRC shelled out £978,256 to people who provided “actionable intelligence” on tax fraud in 2023-24, up from £508,500 the previous year, according to data obtained from a separate Freedom of Information request. The amount paid out in 2023-24 is the highest in at least seven years.

Tax crime prosecutions hit a three-year high of 300 in the year to September, up 19 per cent from 252 in the same period last year. The figures show that the average amount of extra tax collected from each investigation rose to £94,273 in 2023-24, up from £79,315 in 2022-23.