HMRC – Affluent Unit grown, to target households with annual income above £150k

Having seen our own team complete in excess of 1,000 tax returns for clients, we are delighted to hear feedback of our fast efficient service Testimonials,  not to mention client delight at the free parking when they want to drop off files in a hurry!

However as the traditional tax season comes to a close, you may be interested to learn that HMRC is investing in more inspections and has widened their team, along with planned quarterly digital tax returns looming. Are you prepared?

HMRC have increased the number of inspectors to scrutinise the financial affairs of ‘middle-class families’. With 68 new inspectors, the ‘Affluent Unit’ now has 395 inspectors to investigate those with annual income greater than £150K or net worth over £1M.  With rising house prices this will bring many people into HMRC’s net.

HMRC believe more affluent individuals represent a greater risk as they tend to have more complex tax affairs. Greater sophistication is also being shown by HMRC with its Connect computer system which cross references Tax Returns against data gathered from a multitude of sources including banks, building societies, the Land Registry, eBay and Airbnb.

Although the Revenue maintain that taxpayers whose affairs are in order have nothing to worry about, this fails to take into account the high levels of anxiety which tax payers can suffer from when their affairs are being investigated by HMRC and the professional costs incurred when Accountants and Tax Advisors are engaged to act on behalf of clients.

A number of Accountancy Firms provide Tax Fee Investigation cover Tax Protection Fee for a modest annual fee which means no additional fees are charged to defend a taxpayer against an HMRC enquiry. It also puts the taxpayer in a position of strength to robustly challenge any HMRC claims when otherwise a taxpayer may be tempted to settle with HMRC to conclude an enquiry.

To help protect yourself from unwanted attention from HMRC, we suggest you:-

• Maintain good basic records.
• Submit your tax return well before the filing deadline on 31 January each year.
• Employ the services of a reputable firm of Chartered Accountants.
• Take out Tax Fee Cover for peace of mind.

If you feel we could help you and would like to discuss any of the above, please contact David Miller, Director on 0131 317 7377 or email to david.miller@jsca.co.uk