HMRC has yielded more than £13bn worth of tax collections from tax investigations in 2018/19, a 27% increase on the previous period, official figures reveal.
The figures were partly driven by payments HMRC has received ahead of the loan charge being introduced in April 2019, and the results of HMRC's offshore tax campaign last year, while new technology has meant HMRC has also become more successful at identifying cases for investigation that are likely to result in large amounts of extra tax being collected, according to research by UHY Hacker Young.
The cash collected constitutes over a third of HMRC's £34bn compliance yield for the period, with the remainder being made up of future losses prevented; future benefit; product and process analysis; and accelerated payments.
Although HMRC will be pleased that cash collected from investigations has jumped, the majority of that yield is questionable"
Clive Gawthorpe, partner at UHY Hacker Young said, "Although HMRC will be pleased that cash collected from investigations has jumped, the majority of that yield is questionable".
"Overall, almost two thirds of HMRC's yield from investigations isn't actual cash, it's purely hypothetical and could just be a figure plucked out of thin air," he added.
Young said HMRC's recent offshore tax campaign - under which it said taxpayers needed to claim income or gains by September 2018 and pay their liabilities or risk "up to 200% of the amount owed" - is also starting to show results.
HMRC has said that its offshore tax campaign was just one of a number of initiatives that will have contributed to an increase in cash collected.
HMRC action to clamp down on aggressive use of transfer pricing and related errors has also seen a tenfold increase in HMRC fines imposed on multinational businesses in relation to transfer pricing irregularities, according to figures obtained by LCN Legal, which says new country-by-country reporting (CBCR) rules are having an impact on compliance.
HMRC imposed £413,437 in fines in 2018/19, compared to just £45,600 in 2015/16.