Just how welcome is an HMRC welcome, to high net worth taxpayers?

Recently, I’ve been getting regular calls from clients who have received letters from HM Revenue & Customs (HMRC) welcoming them to the High Net Worth Unit (HNWU). And, while HMRC may be welcoming them, being described as a HNW individual is not giving them an appropriately welcome glow.

Unsurprisingly they’re asking, what does this mean for me?

Since 2009 a separate unit within HMRC - the HNWU, comprising about 400 staff spread around the UK - has been dealing with the tax affairs of the UK’s High Net Worth Individuals, who comprise the 6,200 wealthiest individuals in the UK. That particularly low 1:15 staff: client ratio enables the HNWU to spend as much time as they need, getting to understand the tax affairs of its customers.

Initially, the HNWU focused on taxpayers with net worth in excess of £20 million. More recently however, HMRC has decided that individuals with net wealth in the range £10m to £20m will now be dealt with by HNWU and this led to a number of our clients being moved into HNWU and “welcome” letters issued.

The approach taken by HNWU is to assign each individual a customer relationship manager (CRM) who will personally review a customer’s tax return. CRMs are supported, in turn, by specialist advisers within the HNWU and can also seek advice, as required, from technical advisers elsewhere in HMRC.

This CRM model provides taxpayers with a single point of contact in HMRC which can actually be very useful for both taxpayers and agents. It’s now relatively common to receive a call or a letter from a CRM asking for further information or explanations prior to opening a formal enquiry. And, in every case I have seen, this has avoided an enquiry being opened – so this approach probably benefits everyone, taxpayers, CRMs and HMRC.

In summary, clients who are moved into the HNWU can expect a higher level of scrutiny into their tax returns but will, in turn, benefit from a higher level of service from HMRC and may well find that the welcome letter, can actually, be pretty welcome, after all.

Contact us

Alan Gourley
NI Head of Private Client Tax
Tel: +44 (0)289 041 5209

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