How HMRC deals with wealthy individuals

HMRC’s approach to taxpayer compliance and enforcement in relation to wealthy individuals is best understood in the context of its organisational structure. One key component of this is its ‘customer segmentation’ model which groups taxpayers by reference to their tax footprint.

Wealthy individuals sit predominantly within the department’s wealthy and midsized business compliance directorate (WMBC) which is responsible for general compliance including spotting and correcting mistakes. HMRC’s definition of ‘wealthy’ for these purposes currently includes those 700 000 or so individuals with incomes above £200 000 or assets above £2m in any of the past three years.

High risk wealthy programme

HMRC focuses resource on taxpayers who represent a greater risk. Wealthy individuals with tax disputes may therefore find their matter being handled by the department’s high risk wealthy programme (HRWP). This was launched in spring 2018 to be an equivalent for wealthy individuals to the high...