Windsor has been named the UK hotspot for tax avoidance based on numbers of disclosures by taxpayers in the past year, with other stockbroker belt towns also in the top ten, according to research by UHY Hacker Young
Its calculations based on HMRC figures for the year ended 31 March 2020 show there were 23 disclosures of unpaid tax per 100,000 population in Windsor, the highest number of disclosures per 100,000 population in all 279 areas of the country.
The UK average is seven disclosures per 100,000 people.
Affluent towns in the Home Counties, dominate the top 20 areas with the most tax disclosures. St Albans, with 20 disclosures per 100,000 population, is second, followed by Guildford (17) third and Tunbridge Wells in seventh place with 15.
London reported the highest number of disclosures overall, at 1,454, but is ranked only fourth in the table as this equates to a rate of 17 disclosures per 100,000 population.
UHY Hacker Young says individuals have become increasingly likely to admit tax avoidance in recent years in order to escape the harsh penalties regime put in place by HMRC. It adds that wealthier individuals are more likely to make a disclosure to HMRC as they pay a higher rate of tax, which creates a greater financial incentive to avoid paying.
The firm also suggests that greater awareness of the potential penalties for not paying the correct amount of tax amongst self-employed contractors may have also led to more people coming forward.
HMRC has targeted contractors working in the oil & gas sector in Aberdeen, which is ranked fifth on the list, and IT contractors in Reading, which ranked eighth.
Other prosperous cities with high concentrations of high earners, such as Oxford, Cambridge and Exeter also feature in the list of top 20 locations with most unpaid tax admissions.
Sean Glancy, partner at UHY Hacker Young, said: ‘The stockbroker belt is littered with tax avoidance hotspots.
‘The Home Counties is home to many high net worth individuals and well-paid city commuters. These are the groups most likely to have the highest income tax bills – leading to greater incentives to find ways to reduce payments.
‘For those with unpaid tax bills, coming forward and making a disclosure to HMRC is the usually the best route forward. HMRC is often more lenient in terms of the fines handed out in cases where a disclosure has been made.’