During the tax year 2012/13, HMRC made enquiries into the tax affairs of 237,215 compared with just 119,000 in 2011/12.
There has been a significant increase in the number of self-employed individuals being investigated with these figures quadrupling.
And the amount of prosecutions has increased sevenfold in three years – with 1165 people being prosecuted last year following tax investigations, compared to 165 people being jailed in 2010.
HMRC have stated that these large increases are down to changes in reporting methods – specifically results from systems that were previously reported separately are now being reported with their relevant sector, plus the introduction of the case flow system, which has changed the way cases are counted.
An HMRC spokesman added: “Most of the increase in personal tax enquiries is due to changes in how we calculate the numbers of enquires carried out. Enquiries are only opened where we believe there may be a problem causing the wrong tax to be paid.”
These figures have been released shortly after HMRC announced a series of new operations to manage tax collection, including hiring 200 extra investigators in the last three years.
HMRC have also widened their use of bailiffs and debt collection agencies, plus in this year’s Budget George Osborne granted HMRC powers to seize arrears directly from people’s bank accounts.
When enquiries become tax investigations they can be incredibly stressful and can take several years to conclude. It is important that both businesses and individuals are prepared for these eventualities, especially with increased pressure from HMRC.
KinsellaTax staff consists of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers, fully trained in all types of HMRC Investigations.
To discuss a tax avoidance enquiry in confidence with one of our professional tax investigation advisors call 0800 471 4546 today, or alternatively you can send your tax enquiry online.