The Public Accounts Committee (PAC) has called on HMRC to publish its plan for increasing tax yield from ultra high net worth individuals (UHNWI), both domestically and offshore.

The committee noted that HMRC cannot identify how much tax is paid by UK billionaires and warned that there was a lack of clarity over how much tax was paid or avoided by UHNWIs.

In a report on collecting the ‘right’ tax from wealthy individuals, the PAC said it was disappointed that HMRC cannot use its data to identify billionaires to provide transparency about the tax paid by UHNWIs.

The committee highlighted that a billionaire would have wealth and assets 500 times greater than a wealthy person who just meets HMRC’s definition of ‘wealthy’.

It is seeking HMRC’s plan for improving its understanding of the wealth and assets held by billionaires.

The report noted that HMRC had done well to ensure wealthy taxpayers were complying with tax rules, bringing in an additional £5.2bn of tax revenue in 2023/24 compared to £2.2bn in 2019/20.

However, it argued that the scale of this success suggested that either wealthy non-compliance had got worse, or the previous estimates of their tax avoidance were too low, and that HMRC needed to improve its assessment of the amount of tax being avoided.

The PAC found that there were 25 criminal prosecutions of wealthy people in 2023/24 and 456 penalties, down from 1,747 in 2022/3.

The committee said it was particularly disappointed that HMRC had issued no penalties to enablers of tax evasion, despite acknowledging unscrupulous advisers often played a ‘key role’ in helping wealthy people avoid tax.

It recommended that HMRC assessed whether it was using its powers to tackle non-compliance sufficiently and whether it made sufficient use of available sanctions.

“This report is not concerned with political debate around the redistribution of wealth,” commented PAC member, Lloyd Hatton MP.

“Our committee's role is to help HMRC do its job properly ensuring wealthy people pay the correct tax. While HMRC does deserve some great credit for securing billions more in the tax take from the wealthiest in recent years, there is still a very long way to go before we can reach a true accounting of what is owed.

“We already know a great deal about billionaires living in the UK, with much information about their tax affairs and wealth in the public domain.

“So we were disappointed to find that HMRC, of all organisations, was unable to provide any insight into their tax affairs from its own data - particularly given that any single one of these individuals’ contributions could make a significant difference to the overall picture.

“We found a similar apparent lack of curiosity in how wide the tax gap is both for the very wealthy and for wealth stashed away offshore.

"Our report shows that, however you slice it, there is a lot of money being left on the table. HMRC must, under its new leadership, begin collecting the correct amount of tax from the very wealthiest - and this must include wealth that is currently squirrelled away in tax havens. There is certainly room for improvement.

“We hope that HMRC uses both our recommendations and the new funding it has secured in this area to do so.”

Commenting in response, an HMRC spokesperson said: "The government is determined to make sure everyone pays the tax they owe.

"Extra resources were announced in the recent spending review which allows us to significantly step up our work on closing the tax gap amongst the wealthiest. This includes recruiting an extra 400 officials specialising in the wealthy and offshore tax gap, and increasing prosecutions of those who evade tax."

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