Latest news with #taxinvestigation
Daily Mail
a day ago
- Business
- Daily Mail
HMRC ramps up special investigations into the wealthy with AI and helps it claw back £1.5bn in tax in ONE YEAR
An increase in investigations into wealthy people's finances by HM Revenue & Customs yielded £1.5billion in extra tax receipts in one 12-month period, a law firm analysis claims. HMRC more than doubled the amount of tax it raked in via special investigations in the financial year ending 5 April 2024. In the previous tax year, it raised £713million via probes. In a bid to root out hidden income stashes and resolve unpaid tax bills, HMRC is increasingly turning to artificial intelligence and overseas tax authorities, according to experts at law firm Pinsent Masons. The tax authority is utilising a system called the 'Connect Computer System' to assist with its tax collection. The CCS, a computer software system, cross-references business' and people's tax records with other databases to establish fraudulent or undisclosed activities. When hunting for overseas income or assets, HMRC uses initiatives like the Common Reporting Standard and Global Forum, which ensures it is automatically notified when British taxpayers move assets to jurisdictions party to the agreements. In Britain, HMRC deploys its wealthy and mid-sized business compliance directorate team to weed out hidden wealth stashes and get unpaid tax paid. Pinsent Masons told This is Money that HMRC now 'regularly' receives information from overseas, including tax havens, on wealthy Britons. This information is then cross-checked with self-assessment returns data. The specialist HMRC team defines wealthy individuals as people with annual incomes of £200,000 or more in any of the last three years, or those with assets above £2million in any of the last three years. According to Pinsent Masons, the total amount of money collected by HMRC in tax from wealthy taxpayers rose to £5.2billion in the tax year ending 5 April 2024, up from £4billion in the previous tax year. An HMRC spokesman told This is Money: 'It's our duty to ensure everyone pays the right tax under the law, regardless of wealth or status. 'The Government is delivering the most ambitious ever package to close the tax gap and bring in an extra £7.5billion for public services per year by 2029-30.' In recent years, HMRC has been doubling down on its mission to root out concealed income and chase down unpaid tax more proactively. HMRC defines the 'tax gap' as the difference between the amount of tax that should, in theory, be paid to HMRC, and the amount that is actually paid. In the tax year ending 5 April 2023, the tax gap among wealthy people in Britain was estimated to be around £1.9billion. To close the tax gap further, HMRC will be upping its efforts again this year to ensure tax coffers are maximised. During the Spring Statement in March, Rachel Reeves announced that HMRC would get a cash injection of nearly £180million to help close the tax gap. The Spring Statement included £100million in new funding to recruit hundreds more compliance officers and experts tackling wealthy people, plus £79million to spend on third-party debt collectors over the next five years. The measures will enable the tax authority to chip away at unpaid tax liabilities that stood at more than £44billion at the end of December 2024. According to documents published alongside the Spring Statement, about £20billion worth of unpaid tax liabilities are more than 12 months old. The new HMRC hires are expected to net the Treasury £95million in 2029-30, accounting for the costs of hiring and training new recruits. Rachel Reeves unveiled £40billion worth of tax hikes in last autumn's Budget. Ian Robotham, legal director in tax disputes and investigations at Pinsent Masons, said: 'HMRC have been set some very hard targets for extra tax collection by the Chancellor. 'It is hard to see how they can achieve those targets without a sharp rise into tax investigations into the wealthy.' He added: 'The scale of specialist investigations into wealthy taxpayers shows HMRC has already been clamping down much harder on those suspected of underpaying tax. 'Wealthy taxpayers who know they have tax issues to settle should urgently seek professional advice. 'Penalties in respect of inaccuracies can be mitigated down where taxpayers are proactive in contacting them to tell them about and assist them in resolving inaccuracies.'
South China Morning Post
27-05-2025
- Politics
- South China Morning Post
‘No special privileges for tax evasion,' John Lee tells Hongkongers
Hong Kong's leader has slammed organisations that claim to be professional yet defend members under tax investigations, warning that such attempts to pressure authorities will only 'expose their ugly nature'. Chief Executive John Lee Ka-chiu also said that authorities would pursue legal responsibility in accordance with the law, as he responded to a question on whether the government's recent tax reviews on members of Hong Kong Journalists Association were targeting independent media. Last week, the city's largest journalism group revealed that at least 20 members were asked to prepay about HK$1 million (US$127,609) following a tax review by the Inland Revenue Department, arguing the move was supported by insufficient evidence and had 'inevitably' placed extra stress on the reporters and media organisations. Lee said the department had a legal obligation to conduct tax audits and assessments. He added no one had the right to evade taxes or avoid assessments, while noting that evasion could result in a three-year jail sentence. Hong Kong Journalists Association chairwoman Selina Cheng. The group has said that at least 20 members have undergone tax reassessments. Photo: Edmond So 'Regardless of profession – whether civil servants, professionals or non-professionals, journalists or any other occupation – no one holds a special privilege to break the law through tax evasion,' Lee told reporters before meeting with the top decision-making body Executive Council.
New York Times
21-05-2025
- Business
- New York Times
Hong Kong's Beleaguered Journalists Say Their Taxes Are Now Under Scrutiny
Journalists in Hong Kong have increasingly complained about having to self-censor and the fear of arrest since a national security crackdown began five years ago. Now, they say, they have another worry to add to the list: tax inspections. The Hong Kong Journalists Association said on Wednesday that the union itself and six independent news outlets — as well as their founders — are among those who have been subject to tax investigations, saying it added to the pressures being placed on journalists as press freedom dwindles in the Chinese territory. The investigations also extended to the personal taxes of the spouses or parents of some the journalists who are being investigated, the group said. Most of those being investigated by the department have been issued additional tax demands, and a few said they were asked to provide up to seven years of financial information. Selina Cheng, the chair of the association, said that there was not sufficient evidence to prompt most of the tax investigations, and that, in some cases, the authorities had overestimated income without taking into account business expenses. 'Journalists in Hong Kong do not have a very high income. Other than having to pay these claims of taxes, they also need to spend money, time and energy to prove in reverse that they were innocent,' Ms. Cheng said. The number of tax investigations in Hong Kong is relatively low: the Inland Revenue Department said it completed about 1,800 field audit and investigations between 2023 and 2024. The department said in a statement that the investigations followed standard procedures. 'The industry or background of a taxpayer has no bearing on such reviews,' it said. Some independent media outlets in Hong Kong, especially independent ones, have faced great scrutiny since a national security law was imposed by Beijing in 2020 and criminalized some forms of dissent. The authorities have sent police officers to raid newsrooms, arrested media executives and convicted news editors. The authorities have also used subtler ways to try and silence opposing voices of journalists, activists and even book store owners, political analysts say. Groups that are critical of the government have faced problems finding private venues for events, inspections of their premises and even inquiries into their pet licenses. Thomas Kellogg, the executive director of the Georgetown Center for Asian Law, said that administrative harassment can be an effective way to keep in line the remaining outlets that have managed not to cross red lines that could put them at risk for prosecution under national security or sedition laws. Such reviews 'serve as a reminder to media outlets that they have to watch what they say, and that the government has ways to hit back at them over reporting it doesn't like,' he said. Damon Wong, the director and editor in chief of InMedia, said that a tax investigation into the independent news outlet had caused it to use up significant time and resources. In 2024, he appeared in court and paid a fine of about $1,250 for failing to keep a physical copy of the company registry in its office. Tom Grundy, the founder of the Hong Kong Free Press, an English-language online outlet, also said that it has had to redirect time, resources and money away from covering the news as it faced scrutiny from the tax and other departments. Last year, the authorities investigated what the outlet described as 'false complaints,' including claims that a hot sauce it sold as a fund-raiser had come from an unlicensed food factory and that Mr. Grundy's pet dog lacked a license and rabies shot. Both cases were closed after he submitted evidence to the contrary, Mr. Grundy said. This year, Hong Kong's press freedom ranking fell to 140th out of 180 countries and territories, according to an index compiled by the advocacy group Reporters Without Borders. About 20 independent outlets in Hong Kong have closed since 2020, according to a study published last year by the Georgetown Center of Asian Law. A press freedom survey conducted by the Foreign Correspondents Club in 2025 showed that more than half of the respondents were concerned about the risks of arrest or prosecution, and that 65 percent had self-censored in their coverage. Mr. Grundy said that his outlet has always paid its taxes on time and had cooperated fully with the review. But that approach also came at a cost. 'I'm having to act as a one-man compliance department instead of a journalist,' he said. 'It's just not what I expected from the world's freest economy when I chose to set up a business here a decade ago.'
Times
12-05-2025
- Business
- Times
HMRC calls in thousands of documents in Babylon investigation
Thousands of documents have been handed over to HM Revenue & Customs as part of its investigation into the tax affairs of Babylon, the healthcare technology group that was championed by Matt Hancock, the former health secretary, before collapsing into administration. Officials have been investigating tax matters relating to the period before the appointment in August 2023 of administrators from Alvarez & Marsal over Babylon Partners, the main British operating company. In a recent update to creditors, the administrators said HMRC had issued a section 36 notice in December 'obliging it to disclose a large volume of information from its books and records'. • The app that promised an NHS 'revolution' then went down in flames Following a review by administrators, they shared 3,642 documents
