In a startling revelation, The Telegraph has uncovered that hundreds of thousands of honest taxpayers have become targets of investigations by HM Revenue & Customs.
These investigations, which took place between the 2019-20 and 2021-22 tax years, included a staggering total of 267,000 civil taxpayer cases. Surprisingly, none of these investigations resulted in any financial recovery, commonly referred to as “compliance yield”. This figure accounts for nearly 40% of the civil investigations conducted by HMRC during that period, implying that almost two out of five taxpayers who were scrutinized were actually innocent.
UHY Hacker Young, an accountancy firm that obtained these figures through a Freedom of Information request, expressed concern over HMRC’s flawed approach in targeting investigations. They noted that despite the abundance of taxpayer data at HMRC’s disposal, the department fails to effectively analyze it.
Nikhil Oza, a representative of UHY Hacker Young, stated, “While HMRC has an extensive pool of data, its potential is untapped without proper management and analysis.”
This ineffective investigation process can have severe consequences for innocent individuals and businesses. The burden of providing HMRC with requested evidence, coupled with the associated time and costs, can be enormous. Furthermore, the worry of potential fines adds significant mental stress.
Oza concludes, “It is imperative for HMRC to take all necessary measures to prevent taxpayers from enduring unnecessary stress and financial hardship caused by these fruitless investigations.”
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