Syed Rahman details the National Audit Office’s report into HM Revenue and Customs
The National Audit Office (NAO) said in a report that HMRC prosecuted 25 wealthy individuals – which are classed as those earning over £200,000 or holding more than £2 million in assets – for tax fraud in that period.
This is five times the total of just five prosecutions that HMRC achieved in 2021-2022; although it had reported 30 in the 2019-2020 fiscal year; which ended just as the pandemic began. The NAO report outlines the effect that the pandemic had in terms of delays in the criminal justice system.
The latest figures come as HMRC, which can conduct civil or criminal investigations, is set to expand its fraud investigation service. According to the NAO report, HMRC has been directed by government to increase individual prosecutions for all offences it investigates by 20% by 2030.
The NAO says that HMRC’s policy is “to reduce the overall number of prosecutions for all taxpayers in order to focus on high-value, high-harm fraud”. By September 2026, HMRC is expected to have completed a review of the deterrent effect of its criminal investigations that result in prosecutions.
The bulk of HMRC tax fraud work involves use of its civil investigation powers. Criminal action is, according to the NAO, only taken by HMRC when it believes it is appropriate or when it is necessary to send a strong deterrent message. The year to March 2024 saw HMRC’s fraud investigation services begin 45 civil investigations into wealthy people and close 34.
The NAO report recommends that HMRC keeps its definition of wealthy individuals under review and assesses the “skills and capabilities it needs to ensure wealthy tax compliance in the future”.
