HMRC conducted 648 dawn raids last year, up from 623 raids in the previous year, as steps up its campaign against tax evasion, says multinational law firm Pinsent Masons.
Steven Porter, Head of Tax Disputes & Investigations at Pinsent Masons says the scale of HMRC’s programme of property raids and seizure of evidence is often overlooked
Steven Porter, says: “That’s an average of 12 properties searched per week, each requiring search warrants, extensive planning, and the training of personnel. It is a very active programme and comes on top of all the prearranged visits that it makes to investigate individuals and businesses.”
This increase in enforcement activity highlights HMRC’s commitment to tackling tax fraud, which is estimated to have cost at least £5.5bn in 2022/23. HMRC’s latest figures also show that the VAT gap alone stood at £9.5bn in 2023/24**, highlighting the amount of tax evaded and avoided after all of HMRC’s tax investigations.
Steven Porter adds: “The rise in ‘dawn raids’ and the recruitment of more staff demonstrates the Government’s commitment to tackling tax evasion head-on. With growing political pressure to boost enforcement, individuals and businesses should ensure they are fully compliant to avoid becoming the next target for invetigations.”
HMRC have been making more use of property raids to pursue alleged fraud within R&D tax credits. For example, Green Jellyfish was raided in September 2024, a tax consultancy firm which is accused of facilitating false R&D tax relief claims. The company ceased trading following a raid by HMRC.
Pinsent Masons says that the firm’s closure serves as a stark warning to businesses about the risks of non-compliance. Other businesses facing similar scrutiny have seen significant financial and reputational damage.
The Chancellor announced in the Spring Statement that it was providing an extra £100m to HMRC to recruit 500 more compliance officers from April this year.
Adds Steven Porter: “HMRC is becoming increasingly proactive towards high earners businesses suspected of underreporting tax liabilities. Any company or individual flagged as an outlier in HMRC’s data modelling could find themselves under investigation and even subject to an unannounced visit.”
Year end March 31 2024
HMRC Estimate of VAT tax gap: March 2025
