HMRC's Wealthy Individual Investigation Program: Scrutiny of the affluent's tax affairs
High Risk Wealthy Programme (HRWP) Accelerates Tax Disputes for High-Value Cases
The High Risk Wealthy Programme (HRWP), launched by HM Revenue & Customs (HMRC) in spring 2018, is designed to expedite tax disputes in the most complex high-value cases. This programme serves as an equivalent for wealthy individuals to the high-risk corporates programme (HRCP) for large businesses.
The HRWP team, which handles cases under the programme, focuses on individuals with incomes above £200,000 or assets above £2 million. The team's approach to resolving disputes involves a collaborative project plan, which includes a rigorous investigation by HMRC and the involvement of HMRC staff across different departments.
Cases are chosen for the HRWP if there is a significant amount of tax at risk, and compliance interventions by the HRWP team will add value. In the 2019/20 fiscal year, 15% of the 573 prosecutions brought by the Fraud Investigation Service (FIS) were in respect of wealthy individuals, demonstrating close collaboration between the HRWP team and the FIS.
The aim of the HRWP is to resolve disputes with a settlement, but any settlement will be in accordance with HMRC's litigation & settlement strategy (LSS). If a dispute becomes part of the HRWP, the taxpayer is likely to be invited to a meeting with a senior HMRC official.
It is crucial to ensure that all representations made during the course of these civil settlements are accurate and transparent to avoid a criminal referral. Engagement of senior HMRC technical specialists and the involvement of new HMRC personnel could help to remove logjams that may have arisen as a result of HMRC and/or the taxpayer taking entrenched positions.
The HRWP case team will have a senior HMRC case manager and a point of contact for the taxpayer and their adviser. A taxpayer can request for a dispute to become part of the HRWP if the tax at risk is great enough, but the decision is entirely up to HMRC.
Being part of the HRWP can provide an opportunity for the taxpayer to get their dispute considered at a senior level within HMRC, leading to a relatively quick resolution. Another objective of the HRWP is to change taxpayer behavior to reduce risk going forward.
However, it is essential for taxpayers to be represented by a tax adviser with considerable experience in dealing with HMRC disputes when engaging with the HRWP. This is a serious matter, and it is important to ensure that all representations are accurate and transparent.
The HRWP was first introduced by HM Revenue & Customs in 2010, and since then, it has been instrumental in accelerating the resolution of complex tax disputes involving high-value cases.
