Tax fraud: HMRC ramps up dawn raids in crackdown
According to the law firm Pinsent Masons, HMRC carried out an average of 12 property searches each week last year, as the campaign against tax evasion intensified and the government tax body became “increasingly proactive.”
In the year ending March 2024, the government tax body carried out 648 dawn raids, up from 623 raids in 2022/23.
Steven Porter, head of tax disputes and investigations at Pinsent Masons, said: “It is a very active programme and comes on top of all the prearranged visits that it makes to investigate individuals and businesses.
“This increase in enforcement activity highlights HMRC’s commitment to tackling tax fraud, which is estimated to have cost at least £5.5bn in 2022/23.”
National HMRC clampdown
With limited options to secure extra public revenue and scant fiscal headroom, Rachel Reeves made fighting tax evasion a key pillar of the Spring Statement in March.
The Chancellor announced plans to raise over £1bn in additional gross tax revenue, with HMRC given a £100m budget boost to bolster its workforce with 500 more compliance officers.
According to a Public Accounts Committee (PAC) report in February, HMRC had not been “sufficiently curious” about the levels of tax fraud taking place – with levels of the crime likely far higher than official numbers would suggest.
In 2024, the tax gap – the difference between the total tax owed and total tax collected – stood at £5.5bn, which amounts to 0.7 per cent of all taxes owed.
Porter added: “HMRC’s latest figures also show that the VAT gap alone stood at £9.5bn in 2023/24, highlighting the amount of tax evaded and avoided after all of HMRC’s tax investigations.”
“The rise in ‘dawn raids’ and the recruitment of more staff demonstrates the Government’s commitment to tackling tax evasion head-on. With growing political pressure to boost enforcement, individuals and businesses should ensure they are fully compliant to avoid becoming the next target for investigations.”