Increased tax evasion and avoidance among wealthy individuals in the UK

From Yahoo Finance: 2025-06-23 07:05:00

The UK’s tax authority, HMRC, has seen tax evasion and avoidance by wealthy individuals rise from £1.9bn to £2.1bn in a year, per UHY Hacker Young. This group has noted a concerning trend of increasing underpaid tax among affluent taxpayers, with an average 17% annual surge over three years.

UHY Hacker Young predicts HMRC will target wealthy people and small businesses with unpaid tax and a growing tax gap. Chancellor Rachel Reeves has allocated more resources to HMRC for intensified investigations, likely leading to unannounced visits and aggressive mailshots to suspected underpayers.

There is a persistent issue of underreporting income and capital gains among the wealthy, including undeclared income from properties and hidden funds in offshore accounts or trusts. The use of cryptocurrency exchanges to conceal assets from HMRC is on the rise, as detected offshore accounts become more common.

Chauhan notes that there are legal ways for the wealthy to reduce tax bills, such as through pensions, ISAs, EIS, and VCT schemes. Sensible tax planning can also lower IHT bills, which could otherwise harm family wealth. HMRC is cracking down on tax evasion by wealthy individuals, warning of substantial fines or prosecution for offenders, including potential custodial sentences.

Read more: 17% rise in tax evasion and avoidance among wealthy individuals