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Wealthy taxpayers warned as HMRC clamps down on unfiled tax returns

Published on 27 June 2022

'Tax gap' for those with income greater than £200,000 or assets of more than £2million was estimated at £1.2 billion in 2020 to 2021

HMRC is clamping down on wealthy taxpayers who have failed to file a tax return – just days after new data revealed a national "tax gap" of £32billion over the last year, warns international law firm RPC.

The regulator's Wealthy External Forum has announced they are in the process of sending reminder letters to wealthy taxpayers who have yet to file tax returns for 2018-19, 2019-20 and 2021.

Adam Craggs, head of RPC's tax disputes group, said:  "Wealthy taxpayers who have failed to file returns in recent years are being targeted by HMRC. Letters have been issued to those taxpayers who HMRC believes may have failed to declare income or gains, requesting that self-assessment returns be filed by 22 August 2022. 

"Recipients of these letters who take no action may well find that HMRC escalate matters, and they may commence a full scale investigation into their tax affairs. 

"Taxpayers who receive a letter from HMRC should not simply ignore it. If they are unsure of their position they should obtain expert advice on how best to respond as soon as possible."  

The latest HMRC data on the tax gap – the difference between the total amount of tax expected and that which is actually paid – was published last Thursday.

Possible explanations for the missing funds include taxpayers making simple errors, criminal attacks, non-payment and evasion.
Taxpayers in self-assessment are defined as wealthy if their income is greater than £200,000 or where they have assets of more than £2 million.
In 2020 to 2021, the tax gap for wealthy taxpayers was estimated at 4.0% of liabilities equivalent to £1.2 billion.