In letters reviewed by Bloomberg Tax, HMRC sets out to build a full view of billionaires' finances, spanning business holdings, investments and the vehicles that contain their wealth. The tax authority has also contacted some individuals to meet before they file their tax returns. HMRC said the program extends to every billionaire with ties to the UK, even non-UK tax residents, and emphasized that taking part is optional, with recipients able to decline meeting requests.
The scope of the information requests has triggered friction in the private client world. Stuart Ritchie, Principal at Ritchie Phillips LLP, said it is creating "some tension between taxpayers and HMRC, with the tax authority saying, 'tell us everything' about your client, and the advisers responding, 'on what statutory authority are you entitled to that information?'" At Withers LLP, Christopher Groves, who serves as a partner and jointly leads that firm's European private client and tax practice, said, "Most clients are responding politely and saying thank you, but no thank you," adding that in one case HMRC asked about a client's business succession plans, which he called "a definite step too far." HMRC denied its questions exceed its remit.
Charlie Sosna, who leads Mishcon de Reya's private wealth and tax group, said HMRC has reached out to several billionaire clients, requesting wide-ranging information covering property, trusts, company assets and other income and gains, along with the structures behind them. "Some clients are seeking advice on whether they are legally required to provide everything HMRC has requested," he said. "It's really important to take advice early: sometimes the sensible approach is not simply to hand everything over automatically, but to understand what HMRC is entitled to ask for."
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A cross-party Parliamentary committee last year concluded HMRC did not have a complete handle on billionaires' financial affairs. This summer HMRC sent letters appointing each billionaire with a UK footprint a customer compliance manager and offered, in return for transparency, a "more joined-up and direct service," fewer duplicate information requests, conversations focused on areas of "genuine uncertainty or risk" and earlier discussions about transactions or returns. The department said a number of recipients have already engaged positively.
This marks a change in focus. In the past, HMRC assigned compliance managers to high-net-worth taxpayers, but did not single out billionaires as a separate category. Now the department is charting the UK's billionaire cohort by drawing on internal datasets, publicly available information, and material provided by other jurisdictions.
The timing is sensitive. A run of tax hikes and policy changes has already pushed some high-profile investors to move abroad, and, most recently, Chris Rokos - the hedge fund manager who is one of the UK's biggest taxpayers - said he is moving to Greece. If the ultra-wealthy change how they hold assets or report income, you could see knock-on effects in tax receipts, ownership transparency and where capital flows.
Edward Troup - who previously served as HMRC's executive chair and its permanent secretary - put it plainly: the tax authority wants full disclosure of the arrangements behind income, gains and tax management. "If they are not willing to, HMRC should be entitled to assume that there is something they would prefer not to tell HMRC about, in which case HMRC is entitled to make further and deeper inquiries," he said. "That should be the social contract with the billionaire community."
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