Following the study, the Chancellor George Osborne is set to target millionaires, to ensure they pay tax on more than a third of their earnings.
As part of his crackdown on millionaires, the Chancellor has unveiled proposals which will mean that from next year, the total amount of tax relief any individual can claim will be limited to twenty-five percent of their income or £50,000 – whichever the greater value is.
The Chancellor personally studied the anonymous copies of the tax returns submitted by some of the wealthiest in the country, as part of the HMRC study, and admitted he was “shocked” by the number of people who have organised their finances in an effort to avoid paying income tax.
He said: “I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right.
“I’m talking about people right at the top. I’m talking about people with incomes of many millions of pounds a year.
“The general principle is that people should pay income tax and that includes people with the highest incomes.
“I’m not allowed to be shown the names of the individuals but I’ve sat with the most senior people at the Inland Revenue, the people who run some of the high net worth units there. They have given me examples, anonymised examples, and so we are taking action.”
Despite the Chancellor admitting the Treasury are taking action to prevent people from avoiding paying income tax, their proposals have been heavily criticised, with claims they will lead to philanthropic giving.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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