What do you give someone who is so wealthy that they are one of the top earners in Britain?
Their own personal HM Revenue and Customs (HMRC) official to personally look after their taxes of course.
HMRC has admitted the ultimate status symbol for Britain’s 6,500 richest individuals is a tax inspector responsible for ‘building an understanding of each taxpayer’s affairs and behaviours’ and to negotiate with their tax advisers about the money they owe.
These 6,500 taxpayers are the highest earners and account for just 0.2% of the population.
But they pay 15% of all capital gains tax collected and just over 1% of income tax and national insurance.
The personal tax inspectors work for HMRC’s specialist unit that monitors Britain’s rich list to make sure they pay all the taxes that they owe and are tasked with getting to grip with their financial affairs.
Unfortunately, being up close and personal does not seem to work when trying to find that missing tax cash.
HMRC estimates the unit recovers £416 million over and above the £4.3 billion wealthy individuals declared in the 2014-15 tax year.
But that figure is dwarfed by the £1.9 billion HMRC claims they owe and remains uncollected. Some of that money has been owed for three years or more and wealthy taxpayers are unlikely to give up their cash to the tax man without a fight.
Around 6,000 inquiries are open into their tax affairs.
The audit office says £1.1 billion of the ‘missing’ £1.9 billion is held in tax avoidance schemes, while 10 people are under investigation for offshore tax evasion.
Most of the tax disputes are resolved informally. For instance, the unit has not prosecuted anyone for tax evasion since 2010.
The audit office report revealed HMRC wants to increase the number of prosecutions to 100 by 2020, but the figure looks hopeful as the special unit has a disjointed approach to identifying tax evasion and no one knows ‘what works and why’.
New measures to tackle tax avoidance and evasion by the rich include naming and shaming offenders, harsher penalties for not paying the correct amount of tax and tackling tax advisers promoting aggressive tax avoidance.