The National Audit Office (NAO) has highlighted that wealthy individuals in Britain could be evading more taxes than previously thought. A report indicated a significant drop in the penalties imposed on the super-rich, prompting calls for the government to enhance tax collection efforts. While HMRC has increased its revenue from wealthy taxpayers from £2.2 billion to £5.2 billion, it suggests that the actual tax gap may be larger, with substantial unpaid taxes still owed. This situation adds pressure on Chancellor Rachel Reeves, who faces the potential need for tax increases as she prepares the autumn budget amid calls for higher taxes on the wealthy.
According to the NAO report, billions of pounds in additional revenue could be collected from wealthy individuals. The annual compliance yield from well-off taxpayers more than doubled from 2.2bn in the 2019-20 financial year to 5.2bn in 2023-24.
The bottom line is that taxes will have to go up. Labour has faced calls from trade unions and leftwing MPs to target wealthy individuals with higher taxes amid tight constraints on public finances.
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