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July 15, 2021

HMRC investigations in ‘full swing’ following Covid-19 disruption

By Joe Pickard

HMRC’s investigations into taxpayers suspected of tax evasion and avoidance appear to be in ‘full swing’ again, following disruption caused by the pandemic, according to UHY Hacker Young.

Data published by HMRC shows it opened 102,000 compliance investigations in Q1 2021, up 36% from 75,000 in the previous quarter and almost quadruple the low of just 27,000 in the second quarter of 2020.

The amount of extra revenue HMRC brought in from its compliance activity jumped 29% to £14.2bn in Q1 2021, an increase from £11bn in the same period in 2020.

UHY Hacker Young partner Graham Boar said: HMRC is turning its focus back to tax investigations. The pandemic has left it with a lot of catching up to do.

“HMRC’s resources have been stretched during the pandemic, while it has also taken a more lenient approach towards taxpayers. That now appears to be ending.

“Taxpayers with skeletons in the closet should be aware that they are at risk of investigations, fines and even prison sentences. It would be favourable for individuals with unpaid tax to approach HMRC first before they come knocking.”

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