Harrow emerges as unexpected hotspot for tax avoidance

Publications featured in include: City AM

The number of people admitting to tax avoidance in Harrow has jumped 280% since last year, when only 91 taxpayers came forward. Harrow has now taken the crown from last year’s leader, the affluent area of South West London, home to the wealthy neighbourhoods of Chelsea, South Kensington and Wimbledon.

As a result of this bumper year, Harrow now has more disclosures of tax avoidance than the cities of Leicester (141), Nottingham (104), and Manchester (96) combined. 

Well-off neighbourhoods in London, such as Knightsbridge, Chelsea and Putney, as well as the surrounding Home Counties of Surrey and Berkshire continue to make up nine of the Top Ten areas for reporting tax avoidance (see table below). 

Birmingham was the only area outside the South East featured in the top 10, with 238 confessions of tax avoidance. In the same period, the average number for the UK was just 57.  

Taxpayers today have become more likely to confess to tax avoidance to avoid the increasingly punitive penalty regime introduced by HMRC. Since 2017, HMRC penalties can now be up to 200% of the amount of tax not paid. With many of the areas in the Top 10 having some of the highest tax bills in the UK, taxpayers there may be more inclined to self-report unpaid tax. 

Andrew Snowdon, Partner and Head of Tax in our London office says, “Harrow is not where people would expect to see such high levels of tax avoidance.”

“Historically tax avoidance reports originate most often in the wealthiest boroughs of London and the stockbroker belt – places where wealthier individuals might have assets offshore. Harrow doesn’t really fit that profile.”

Snowdon continues, “Some people may think it’s easy to avoid reporting tax, such as from by to let income. In actual fact, they are making their situation far more difficult by letting unpaid tax build up until it is finally discovered by HMRC.”  

Harrow tops the table as UK’s new hotspot for tax avoidance

Top 10 tax avoiders

*Year to 5 April 2021
** Postcode areas

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