Research and analysis

Executive summary

Published 2 November 2023

Background and methodology 

BMG Research was commissioned by HM Revenue and Customs (HMRC) to conduct research to help develop co-operative compliance to support a healthy tax administration system. The research objectives sought to explore:  

• the extent to which agents trust that HMRC Wealthy Compliance Group’s approach to wealthy individuals is fair and competent  
• if and how its communications foster co-operative relationships  
• attitudes towards compliance 
• how HMRC Wealthy Compliance Group can focus support and challenge non-compliant behaviour

The research was conducted in 2 phases. First, an exploratory qualitative phase of 30 in-depth interviews with agents of wealthy individuals. Second, a quantitative survey with 500 agents of wealthy individuals. The following report details both the qualitative and quantitative findings. The findings have been presented together, with the qualitative findings used to further describe or explain the survey data. Disparities or gaps between the research approaches have been highlighted, where appropriate. 

Key findings 

Trust and confidence 

Agents have confidence in HMRC Wealthy Compliance Group (the Wealthy Team), as evidenced through both the qualitative and quantitative findings. The Team was seen to provide expert knowledge and swift resolution, which consequently drove feelings of trust.  

Awareness of the Wealthy Team varied. Less than half (45%) were aware of the Team, and 3 in 5 knew almost nothing of what the Team does. Of those who had contact with the Wealthy Team, almost a quarter (23%) also knew almost nothing of what the Team does. This suggests while the Wealthy Team serves an important and useful function for agents of wealthy individuals, more needs to be done to raise awareness of the team and to foster trust and confidence. 

The Wealthy Team was highly rated on expertise, timeliness, and ease of access. Survey respondents perceived the Wealthy Team to outperform wider HMRC on customer experience, driven by these measures. Consequently, agents were open to a reciprocal, collaborative relationship because they felt it would deliver a better service to wealthy clients. 

While the Wealthy Team’s service levels and professionalism are well regarded, agents were slightly less likely to believe the Team trusts them to minimise tax evasion and avoidance than HMRC (66% believed the Wealthy Team trusts them; 74% believe HMRC trust them). This may reflect the fact that contact with the Wealthy Team is more likely to be in relation to compliance checks than contact with HMRC more generally. These sentiments were echoed by qualitative participants, where agents felt the Wealthy Team do not always view them as equals. On the whole, participants wanted the Team to view them as allies in compliance and saw a reciprocal relationship as beneficial and as demonstrating trust. 

The Wealthy Team and HMRC were largely viewed as equally transparent. HMRC was associated with greater transparency on legislative issues and guidance; the Wealthy Team was felt to provide more transparency at an individual level. This finding reflects the perceptions of the Wealthy Team’s expertise and ease of access, and HMRC’s overarching administration functions. 

Communications and co-operative relationship with the Wealthy Team 

Agents felt that a more cooperative and collaborative relationship with the Wealthy Team would benefit their wealthy clients. Almost half of respondents (46%) believed they collaborate with the Wealthy Team to some extent and over half (55%) were willing to collaborate more.  

Trust in and willingness to co-operate with the Wealthy Team and HMRC is undermined by delayed or no response to correspondence. Some qualitative participants were frustrated that HMRC imposes a 30-day response time for customers. However, HMRC can take over three months to reply to letters, which was seen to be inconsistent with their own rules and therefore unfair. Nudge letters1 (only discussed in the qualitative interviews) - were also felt to be unfair and described as “fishing expeditions”. Agents wanted to be contacted before clients on such issues in order to work collaboratively to resolve the Wealthy Team’s queries. 

Email was by far the most preferred contact method for compliance communications (69%). It contributed to perceptions of efficiency and supported the belief agents were speaking to the right individuals in the Wealthy Team. A role remains for telephone contact and letter correspondence. Telephone provides the benefits of informal discussions as well as potential for near immediate resolution.  

Suggestions for areas of greater support focused on complex areas of taxation (57%), agent engagement (44%), and improved communications (36%). These reflect the Wealthy Team’s perceived strengths, namely expertise, timeliness and ease of access. Qualitatively, these were also key areas of both strengths and improvements. This indicates the Wealthy Team has a solid foundation on which to enhance collaborative communications with agents. 

Attitudes towards compliance and avoidance 

Less than half (47%) of survey respondents were aware of the definition of ‘wealthy’ (£200,000 annual income or £2 million in assets). Those who were unaware of it (after being informed of the definition) were asked alongside those who were aware of it if they agreed with it, and while more than half of all survey respondents did (54%), more than a quarter (28%) did not. Two-thirds of those disagreeing with the definition (66%) thought that the income threshold should increase. Qualitative participants observed that house price increases in the south-east of England meant many homeowners fit this definition, despite not having a wealthy lifestyle. 

Agents rejected non-compliance on the basis of strong professional ethics and morals. These professional values are formalised by their professional bodies’ codes of conduct, which in turn are informed by HMRC’s Standard for Agents. Notably, qualitative participants felt their clients do not have an adversarial relationship with HMRC. Instead, agents wanted the Wealthy Team to acknowledge their important role in ensuring wealthy individuals’ compliance.