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Super-rich paying less income tax despite HMRC 'crackdown'

Are you of High Net Worth?

If you have assets with a value of more than £20 million, less any debts, then HM Revenue and Customs judges you to be super-rich and you join an exclusive and growing club of the wealthiest people in Britain.

In 2009 HMRC set up a specialist unit, following criticism it was failing to tackle avoidance by wealthy taxpayers.

But the performance of HRMC's High Net Worth team will be challenged on Wednesday when the organisation's chief executive, Jon Thompson, appears before the Public Accounts Committee of MPs.

A recent report by the National Audit Office shows that since 2009, while the total amount of income tax collected in Britain has risen by £23 billion to £273 billion, the amount paid by the super-rich appears to have fallen by £900 million to £3.5 billion.

The amount of tax paid by the super-rich appears to have fallen since 2009. Credit: National Audit Office

While it's true that in 2014 the top rate of income tax was cut to 45%, over the last six years the number of high net worth individuals has risen sharply from 5900 to 6500. The economy has been recovering, activity has increased and personal wealth should have grown too.

Factor-in inflation and the MP, Charlie Elphicke, a former tax lawyer, believes there's evidence that while ordinary people are paying more income tax, the super-rich are still finding ways to shelter their money away from the taxman.

The government wants the wealthy to pay as much tax as possible but it doesn't want to upset them in case they move their wealth abroad.

However some wealthy people are moving back. Tonight INEOS is throwing a party at it's new headquarters in London, to celebrate being "Back in Britain".

The company and its owner Jim Ratcliffe - the 20th richest man in Britain, according to the Sunday Times - were based and taxed in Switzerland but now they're back onshore.

Jim Ratcliffe, the owner of chemicals company INEOS, is the 20th richest man in Britain. Credit: ITV News

The billionaire told me that there was "no special deal" with HMRC, he will pay income tax, national insurance and capital gains tax at the appropriate rate and as a result will pay "much more" tax.

INEOS has ambitions to drill for shale gas in Britain but Ratcliffe denied that he'd been under any pressure from the British government to relocate his tax affairs.

In a statement HMRC told ITV News that the tax take fluctuates from year to year and that it is "extremely good" at ensuring the rich pay the correct amount of tax - a task it says has been made easier by recent reforms.

HMRC says its now receiving unprecedented amounts of data on those with offshore accounts in places like the Channel Islands and Bermuda, making it easier to target dodgers.

On Monday new legalisation was published introducing fines for accountants or other advisers who promote tax avoidance.