Pinsent Masons comments on Spring Statement: Government continues investing in HMRC investigations – £161m in investment forecast to yield £3.2bn

by | Mar 23, 2022

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In today’s Spring Statement, the Chancellor announced that the Government will invest a further £161m into HMRC’s investigations into taxpayers. That £161m is forecast to turn into £3.2bn in extra tax by the end of the 2026/27 tax year.

Steven Porter, Partner at Pinsent Masons, the multinational law firm, says that the Government’s decision to continue investing in HMRC’s investigations work is a sign of how successful HMRC has been in bringing in extra tax through compliance activity in recent years.

Recent research by Pinsent Masons found that tax investigations into large businesses brought in £69 in extra tax for every pound spent on staff costs for those investigations – a 6,800% return on investment for the Treasury (see table below).

Steven Porter said: “HMRC’s investigations work brings an enormous return on investment for the Treasury. As long as HMRC keeps delivering so much extra tax, the Government is going to keep pumping extra funding into it.”

 

“Tax investigations are going to have a major role to play in repairing public finances following the disruption of the last two years. The resource HMRC now has for investigations is very substantial and the signs are that it will only get bigger.”

Extra tax yield per pound spent on investigations staff – by HMRC directorate

 

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