Understanding HMRC High Net Worth Unit

HMRC focus on wealthy taxpayers has never been sharper. With an additional £100m in funding and 5,500 new compliance officers being recruited, investigations into high-value individuals are set to rise significantly.

At the heart of this effort is HMRC High Net Worth Unit (HNWU) — a specialist division tasked with monitoring and investigating individuals with assets of £10 million or more.

For wealthy taxpayers, this means increased scrutiny, a higher risk of investigation, and a greater need for proactive tax compliance and expert defence strategies.

What Is HMRC High Net Worth Unit (HNWU)?

The High Net Worth Unit is HMRC specialist team created to oversee and investigate the tax affairs of the UK’s wealthiest individuals.

Key Features:

• Threshold: Focuses on individuals with £10m+ in assets.
• Dedicated Caseworkers: Each taxpayer is assigned a compliance manager who monitors their tax affairs.
• Complex Focus: Reviews trusts, offshore accounts, company structures, and inheritance planning.
• Proactive Approach: Regularly reviews filings, lifestyle, and third-party data to identify anomalies.

Unlike standard HMRC enquiries, HNWU cases are often long-term relationships, with HMRC monitoring wealthy taxpayers on an ongoing basis.

Why HMRC Created the HNWU

The rationale behind the HNWU is simple: wealthy taxpayers contribute a large proportion of total UK tax revenues, and their affairs are often complex and international.

Goals of the HNWU:

1. Close the Tax Gap – Ensuring wealthy individuals pay their full tax liabilities.
2. Monitor Complex Structures – Offshore trusts, holding companies, and estate planning are high-risk areas.
3. Increase Prosecutions – Wealthy taxpayers are increasingly targeted for criminal cases to deter others.
4. Public Policy Pressure – Demonstrating fairness by focusing on the wealthy “paying their fair share.”

How the HNWU Investigates Wealthy Taxpayers

The HNWU has extensive powers and access to advanced data tools. Investigations are often triggered by:

• Inconsistent tax returns compared to lifestyle.
• Offshore accounts and trusts flagged via international data-sharing.
• Civil proceedings (e.g., divorce cases) expose financial irregularities.
• Third-party data from banks, land registries, and even social media.

Tools at the HNWU’s Disposal:

• Connect AI system – Cross-references over 1 billion data points daily.
• Information-sharing agreements – CRS and FATCA provide HMRC with visibility into offshore accounts.
• Compulsory production orders – Banks and trustees may be compelled to hand over records.
• Interviews under caution – Used in cases of suspected fraud.

Risks for Wealthy Taxpayers

If you fall within the HNWU’s remit, you face significantly higher levels of scrutiny. Risks include:

• Prolonged investigations lasting years.
• Financial penalties of up to 200% of unpaid tax (particularly for offshore non-compliance).
• Criminal prosecution if fraud is suspected.
• Reputational damage, especially if proceedings become public.

With HMRC targeting a 20% increase in prosecutions, HNWU cases are now more likely than ever to result in criminal referrals.

Case Study: Divorce Proceedings and the HNWU

The Standish v Standish (2025) divorce case illustrated how private financial arrangements can become public through litigation. For the HNWU, such disclosures are invaluable — revealing offshore wealth, inheritance tax planning, and undeclared transfers.

Wealthy taxpayers should assume that any financial disclosure in court could find its way to HMRC’s radar, particularly if monitored by the HNWU.

How to Protect Yourself Against HNWU Scrutiny

1. Proactive Tax Compliance: Ensure that all filings, structures, and international arrangements are compliant before submitting them to HMRC for review.
2. Regular Reviews of Offshore Structures: The days of hiding assets offshore are over. Structures must be transparent and justifiable.
3. Use Voluntary Disclosure Early: If irregularities are detected, consider utilising the Contractual Disclosure Facility (CDF) to avoid prosecution.
4. Coordinate Tax and Legal Strategies: Work with tax advisors and legal counsel to ensure litigation (e.g., divorce, probate) does not inadvertently expose irregularities.
5. Specialist Representation: Engage experts in tax dispute resolution and HMRC defence who understand HNWU investigations and can negotiate effectively with HMRC.

HMRC’s High Net Worth Unit targets wealthy taxpayers with assets exceeding £10 million, utilising increased funding and advanced AI tools for enhanced scrutiny. The best defence for high-net-worth individuals is proactive compliance and voluntary disclosure.

If you fall within HMRC’s threshold or fear a potential investigation, our specialists offer tailored tax defence and compliance support to help minimise risks, reduce penalties, and avoid prosecution. Schedule a confidential consultation today.