Billionaires push back over UK tax managers keeping tabs on their money

Billionaires with UK tax obligations are protesting against HMRC's requests for extensive personal financial information. The letters sent by HMRC to these individuals are sparking debates over the legality and cost of compliance for the wealthy. In the summer, HMRC contacted all billionaires with a UK tax presence, appointing a customer compliance manager for each.

A recent parliamentary committee had found HMRC lacked a complete understanding of billionaires' financial affairs. In response, HMRC has revised its definition of UK billionaires to include those using offshore structures or property. The letters, obtained by Bloomberg Tax, reveal HMRC's aim to create a comprehensive picture of billionaires' financial lives, including their business interests, investments, and wealth structures.

HMRC has also sought meetings with some billionaires before they file their tax returns. This move risks escalating tensions with UK billionaires at a time when recent tax hikes and policy changes have led to some investors leaving for overseas. Chris Rokos, a prominent UK tax payer and hedge fund manager, announced his departure for Greece following the receipt of his letter.

Alexander Gurko, a Russian-born British billionaire trader, expressed his concerns about the level of disclosure requested on LinkedIn. Tax professionals are objecting to the intrusion, stating that clients should only communicate with HMRC through their agents unless a formal inquiry is opened. The balance lies in understanding the extent and necessity of the information requested versus what is considered an overextension.

HMRC has promised a more integrated service with fewer repeated information requests, focusing on areas of genuine uncertainty or risk, and initiating discussions about transactions or tax returns early. However, some requests, such as inquiries about business succession plans, are seen as excessively intrusive. In exchange for transparency, HMRC has assured billionaires of a more direct service, fewer repeated requests, and discussions focused on areas of genuine uncertainty or risk.