Treasury delays action on wealthy tax audit as rich share of UK tax gap rises to 6%

Britain's public spending watchdog told Parliament in May 2025 that HM Revenue and Customs could not say how much tax the country's richest people pay. Fifteen months later the question is still unanswered, and the share of unpaid tax attributed to the wealthy has risen again.

The Treasury Minutes Progress Report published on 4 June 2026 (CP 1593) sets out where the work has got to. Of the outstanding recommendations the Public Accounts Committee made in its fortieth report of session 2024-26, published on 16 July 2025, almost all now carry a target implementation date of autumn 2026. HMRC's plan for raising more tax from wealthy taxpayers, originally due in spring 2026, is now promised by the end of 2026. A better estimate of the offshore tax gap, the committee's most pointed demand, is not expected to be published before 2027.

The underlying audit was the National Audit Office report Collecting the right tax from wealthy individuals (HC 876), ordered to be printed on 15 May 2025 and published on 16 May. It counted 850,000 people in HMRC's wealthy population in 2023-24, defined as those earning more than £200,000 a year or holding assets above £2 million in any of the previous three years. They were about 2% of individual taxpayers and paid £119 billion in personal taxes, a quarter of all personal tax receipts. HMRC spent roughly £350 million administering their compliance and collected £5.2 billion in compliance yield, up from £2.2 billion in 2019-20.

The committee read that doubling in an uncomfortable way. Its report said the scale of the success suggested either that non-compliance among the wealthy had got worse, or that previous estimates of the extent to which they were avoiding tax were too low. It also found HMRC cannot identify how much tax UK billionaires pay. It contrasted this with the United States, where the Internal Revenue Service has worked with researchers to link its data to the Forbes 400, and noted HMRC had not facilitated a similar analysis with the Sunday Times Rich List.

The enforcement numbers in the NAO report are starker than the yield figures. HMRC issued 456 penalties to wealthy individuals in 2023-24, totalling £5.8 million, against 2,153 penalties worth £16.2 million in 2018-19. Twenty five wealthy individuals were prosecuted following criminal investigations that year. Investigations yielding more than £100,000 took an average of 40 months to close. Some 46% of the wealthy team's investigations closed with no yield at all, down from 63% the year before. Yield leaned heavily on a handful of cases: 213 of them, 2.4% of casework, delivered 77% of downstream yield, and a single case involving a person who failed to declare offshore trusts brought in £652 million in 2023.

Then came the statistics. HMRC published Measuring tax gaps 2026 on 23 June 2026, estimating the gap for 2024 to 2025 at £59.2 billion, or 6.4% of £924.4 billion in theoretical liabilities. Wealthy individuals accounted for 6% of that gap, up from 4% in 2020 to 2021. Small businesses accounted for 62%, up from 58%. Tax Justice UK, which gave written evidence to the committee's inquiry, said the same day that the wealthy figure had moved from £2.5 billion to £3.6 billion.

The sources do not agree on what that movement means. The NAO wrote that HMRC's published wealthy tax gap estimate had been stable and low, and credited the department for being one of the few tax authorities to publish such an estimate at all, while warning there is too much uncertainty around it, notably for offshore wealth. The committee was blunter, calling HMRC's partial estimate of offshore evasion, £0.3 billion, implausibly low against the £849 billion UK residents held in offshore accounts in 2019 across the 93 jurisdictions then exchanging account information. HMRC's position in the June 2026 progress report is that it is still scoping how to capture wealthy individuals and the entities they control, and that any published offshore figure must be methodologically sound first.

What is not known is whether a rising wealthy share of the tax gap reflects more avoidance, better detection, or a definition that files a billionaire alongside someone who has just crossed a £2 million asset threshold. HMRC says a new population model drawing on a broader range of data will let it revisit that definition, and has promised the committee an answer in autumn 2026. It has also declined to set any annual target for penalties against the advisers who enable evasion, a sanction it has so far never used.