HMRC is no longer fit for purpose on serious offshore evasion

A £59.2 billion tax gap, unused offshore enabler penalties, a Failure to Prevent offence that sat without a corporate charge for nearly eight years, and informant rewards of £852,438 against 164,670 tip-offs: is HMRC fit for the harder offshore purpose?

Charles Pycraft · November 2026 · London

Cover card: HMRC is no longer fit for purpose on serious offshore evasion. Navy ground with gold net motif and a small CP mark; title rendered by the site. An investigation by Charles Pycraft

HMRC's latest tax-gap estimates, published in June 2026, put the provisional gap for 2024/25 at 6.4 per cent, or £59.2 billion. The estimate for 2023/24 was revised upwards to 6.0 per cent, or £52.8 billion. In 2025/26, HMRC reported a record £50.2 billion in compliance yield. Those are not the numbers of a sleeping department.

The question this piece asks is narrower, and harder. Despite a whistleblower and informant policy, Automatic Exchange of Information data from more than a hundred jurisdictions, and newer criminal and civil powers aimed at offshore and corporate facilitation, is HMRC really going after the bigger, complex offshore and serious-evasion targets? Or does the public record show a machine that lands smaller, easier-to-enforce catches at scale, while the hardest money, the structured offshore money, still moves faster than the state can follow?

The argument below is an opinion. It is grounded in HMRC annual reports and accounts, Measuring Tax Gaps statistics, National Audit Office and Public Accounts Committee reports, parliamentary answers, published reward-scheme rules, and well-reported concluded cases. It does not allege misconduct by any named official. It does not claim that every wealthy taxpayer cheats. It asks whether the design, the published outcomes and the gaps in what HMRC itself will put a number on leave skilled counsel able to price the risk of serious offshore non-compliance, and leave ordinary taxpayers with little reason to believe the biggest fish are the ones that get caught.

The offshore gap HMRC has yet to measure fully

HMRC is one of the few tax authorities that publishes an annual tax-gap series. That is to its credit. The same series, and the scrutiny around it, also show where confidence frays.

HMRC defines wealthy individuals broadly as those earning more than £200,000 a year or holding assets exceeding £2 million. The wealthy tax gap was estimated at £1.9 billion for 2022/23, the figure scrutinised by Parliament in 2025. HMRC's latest estimate for 2024/25 is £3.6 billion. In the same period, compliance yield from wealthy taxpayers rose from £2.2 billion in 2019-20 to £5.2 billion in 2023-24. The National Audit Office noted that the increase in yield was more than £1 billion greater than the annual wealthy tax-gap estimate, and that this raised the possibility that underlying non-compliance among the wealthy could be higher than previously thought.

The Public Accounts Committee, reporting in July 2025, questioned HMRC's confidence in the £1.9 billion wealthy tax-gap estimate and described its partial offshore estimate of £0.3 billion as implausibly low in the context of £849 billion held by UK residents in offshore accounts in 2019. Offshore balances are not themselves unpaid tax, but the Committee considered that the scale of the financial activity raised questions about the completeness of HMRC's estimate.

That £0.3 billion figure is HMRC's own experimental statistic, published in October 2024, for undeclared foreign income in 2018-19 among individuals covered by Automatic Exchange of Information and traced to an HMRC record. HMRC has been clear that it is a partial estimate. It excludes companies with foreign income, and individuals, income types and jurisdictions outside the Automatic Exchange net. Internally, according to the NAO and the PAC, HMRC has identified a much larger amount of tax at risk from all forms of offshore non-compliance. HMRC has not yet published a comprehensive offshore tax-gap estimate, but in October 2026 it announced plans to publish a standalone estimate in 2027.

When a department that estimates the national tax gap to the tenth of a percentage point has yet to publish a comprehensive offshore estimate, the question is how much important non-compliance remains outside the published measure. HMRC's commitment to an estimate in 2027 is welcome, but the result and its coverage remain to be seen.

Powers that sat unused

Parliament has given HMRC tools that look, on paper, designed for serious offshore and facilitation cases.

The Criminal Finances Act 2017 created corporate offences of failing to prevent the facilitation of UK and foreign tax evasion. Unlimited fines. A "reasonable prevention procedures" defence. Guidance from HMRC on what good looks like. A Ministry of Justice answer in February 2025 confirmed that, since introduction, there had been no prosecutions or convictions of corporations under either offence in England and Wales. Press and professional reporting in August 2025 then recorded the first corporate charge, against an accountancy firm, with a provisional trial date years ahead. A charge after nearly eight years is not the same as a conviction. The first corporate charge came nearly eight years after the offences were introduced. That delay raises questions about enforcement, but prosecution numbers alone cannot establish whether the legislation changed corporate behaviour or prevented facilitation.

Civil powers against offshore enablers tell a similar story. The offshore enabler penalty, introduced in 2017, was sold as a way to fine accountants, lawyers and others who knowingly help clients evade or fail to comply offshore, with penalties up to the higher of £3,000 or 100 per cent of the potential lost revenue. Freedom of Information reporting in 2024 found that HMRC had not issued a single such penalty in five years. The Public Accounts Committee in 2025 found it particularly disappointing that HMRC had still issued no penalties to enablers of tax evasion, despite acknowledging that unscrupulous advisers often play a key role, and asked HMRC to explain why and how it would start using the sanction.

Prosecutions have been steered toward fewer, higher-harm cases: 310 prosecutions and 281 convictions in 2024-25 (91 per cent success) on the Fraud Investigation Service note, against 691 prosecutions in 2019-20 on the PAC's earlier account. For the wealthy population the PAC recorded only 25 criminal prosecutions in 2023-24, and 456 penalties, down from 1,747 the year before. Investigations yielding more than £100,000 took 40 months on average; nearly half of wealthy-team investigations closed with no yield. A system that prefers civil settlement and upstream nudges can still protect the Exchequer. The argued fitness question is whether unused enabler and Failure to Prevent tools tell sophisticated offshore counsel that those sticks are rare enough to price as low probability.

Whistleblowers: volume without bite

HMRC invites the public to report tax fraud. In 2024-25 it received 164,670 reports of alleged fraud and paid £852,438 in informant rewards, according to figures obtained by Price Bailey under the Freedom of Information Act and also reflected in HMRC's annual accounts aggregates. Those totals do not show how many reports led to investigations, tax recoveries or criminal proceedings. HMRC does not publish the number of individual rewards or their sizes, citing informant confidentiality.

In 2025/26, HMRC reported 170,992 allegations of non-compliance and £1.388 million in informant payments. Those aggregate figures do not yet isolate the performance of the strengthened reward scheme launched in November 2025.

A strengthened reward scheme for high-value tax fraud and avoidance, announced at Autumn Budget 2024 and launched in November 2025, offers eligible informants a discretionary 15 to 30 per cent of additional tax collected where recovery reaches at least £1.5 million (excluding interest and penalties). Until outcomes appear in the annual accounts, the old scheme's public arithmetic remains the evidence base: mass reporting, modest discretionary pay-outs, and no published trail from tip to offshore conviction.

Follow the money: who benefits while enabler tools sit idle

Offshore evasion does not travel alone. It travels with enablers.

At category level, the beneficiaries of unused enabler penalties and a Failure to Prevent offence that sat without a corporate charge for nearly eight years are the intermediaries who design, sell and maintain the structures: accountancy and tax advisory firms, law firms, trust and company service providers, banks that open and hold the accounts, and professional bodies whose members populate those desks. The PAC in 2025 said unscrupulous advisers often play a key role and found it particularly disappointing that HMRC had still issued no offshore enabler penalties. Freedom of Information reporting in 2024 had already found none in five years. A market that can price a low probability of enabler sanction is a market that keeps selling. Holding money offshore is lawful, and the Committee's £849 billion figure for offshore account balances is not an estimate of evasion.

None of that is a finding against any named firm or adviser, and it does not treat every adviser as an enabler. The concluded Ecclestone and Hirst cases reported below concern taxpayers, not enablers. It describes the category that gains when the published stick is rare. Ordinary taxpayers fund the gap through the Exchequer. Informant rewards of £852,438 against 164,670 tip-offs in 2024/25, figures reported via a Price Bailey freedom of information request and also reflected in HMRC accounts aggregates, show how little of the tip volume converts into published cash recognition for the people who try to close it from outside.

Easy catches. Hard catches.

HMRC's own annual report for 2024-25 showcases an offshore criminal case study: two property developers who, HMRC says, used overseas-territory companies to hide land-sale proceeds, evaded more than £3.2 million, failed to make a full Code of Practice 9 disclosure, were convicted, repaid the tax and paid costs. Court and CPS reporting name Stephen and Michael Hirst. That is a real win. It is also, in structure, a land deal, a finite company trail and a refusal to settle. It is the kind of case a determined Fraud Investigation Service team can take to court.

The harder pattern sits in the PAC and NAO material. About 73 per cent of wealthy individuals have agents, rising toward 90 per cent at the top. Customer compliance managers cover about 15,000 of a wealthy population HMRC now puts at 1.3 million. The PAC reported in 2025 that HMRC lacked a clear picture of UK billionaires in its tax data; in October 2026 HMRC said it had identified more than 200 with a UK tax footprint. Progress, without published tax paid by that group.

One concluded case: Ecclestone, from a false statement to a £652.6 million settlement

One concluded matter, reported from open court, shows what happens when the facts finally crystallise. Bernie Ecclestone pleaded guilty at Southwark Crown Court on 12 October 2023 to one count of fraud by false representation, over an answer given to HMRC in July 2015. He received a 17 month sentence suspended for two years, and a civil settlement of about £652.6 million covered tax, interest and penalties across 18 tax years (sentencing remarks / contemporaneous reporting; settlement about £652,634,836). That is a real win for the Exchequer. It is also a single, exceptional outcome after years of process, not a steady drumbeat of similar results across the offshore population the PAC says HMRC still cannot fully measure. Holding money offshore is lawful; the conviction was for the false representation, not for "tax evasion" as a free-standing label.

The case is useful precisely because it is concluded and public. It shows HMRC can land an enormous civil and criminal outcome. It does not show that enabler penalties are in regular use, or that Failure to Prevent has become a lived corporate risk, or that the partial £0.3 billion offshore estimate is adequate against £849 billion in reported offshore account balances. One headline settlement does not make a system fit for the harder purpose.

Automatic Exchange helps. In 2025/26 HMRC received CRS information on more than 11 million financial accounts from 104 jurisdictions and reported £1.13 billion in cumulative yield attributable to automatic exchange since CRS began, with the Worldwide Disclosure Facility taking more than £430 million since it opened. Disclosure facilities select for people who can be prompted into compliance. The residual challenge, on HMRC's own strategy papers, is opaque structures across trusts, non-financial assets and jurisdictions that sit awkwardly in CRS data.

Underpowered relative to the flows, or choosing the soft path?

HMRC is not a tiny regulator. Compliance yield of £50.2 billion and funded recruitment through 2029-30 are the opposite of absolute starvation. The fitness argument is relative: to cross-border complexity, to an unpublished full offshore gap, and to a wealthy population now put at 1.3 million. This piece does not claim to know officials' private intent. It notes the public pattern. Measure the easy parts carefully. Publish a partial offshore estimate Parliament calls implausibly low. Prefer civil yield. Leave enabler and Failure to Prevent tools largely idle. Pay £852,438 in informant rewards against 164,670 tip-offs in 2024/25.

A fair question follows: is the underpowered feel an accident of measurement difficulty and court cost, or a political and managerial choice that maximises short-term cash yield while avoiding the slower, riskier fights at the top of the wealth distribution? Either reading ends in the same place for fitness. If the purpose is to make serious offshore non-compliance economically irrational, the published outcomes do not yet show that purpose being met at scale.

What should change

1. Publish a fuller offshore tax-gap range in 2027 as promised, including corporate foreign income and the main non-AEOI blind spots, with clear caveats. The PAC called the £0.3 billion partial estimate implausibly low against £849 billion in reported offshore balances. Measurement is the first enforcement tool.

2. Report annually on enabler penalties charged and Failure to Prevent investigations, charging decisions and outcomes, without waiting for another PAC letter. Powers that sit unused teach the market that facilitation risk is theoretical.

3. Judge the strengthened informant scheme by outcomes. HMRC launched a strengthened reward scheme in November 2025. It is too early to judge it, and the test will be whether large awards are in fact paid, including on offshore and wealthy cases. Separately, segment the wealthy population by complexity as the PAC asked. Opinion: ambitions for wealthy prosecutions and enabler sanctions should match the rhetoric of "no safe havens," not a 20 per cent rise that means a handful of extra charges a year.

Verdict

On the public record of a £0.3 billion partial offshore estimate set against £849 billion in reported offshore account balances (balances are not themselves unpaid tax), enabler penalties unused as of the PAC's 2025 findings, a Failure to Prevent offence that sat without a corporate charge for nearly eight years before the first charging decision, and 2024/25 informant rewards of £852,438 against 164,670 tip-offs, the argued answer is that HMRC is no longer fit for that harder purpose. HMRC's provisional tax gap for 2024/25 is 6.4 per cent, or £59.2 billion (Measuring tax gaps 2026). Compliance yield hit a record £50.2 billion in 2025/26. Large concluded cases do land: Ecclestone's 2023 guilty plea to fraud by false representation and about £652.6 million settlement, and the Hirst brothers' more than £3.2 million offshore conviction, show that. The published informant and gap figures still leave offshore evasion, the hardest part, the least measured.

When the gap stays open, the shortfall sits with the Exchequer more often than with the offshore residual. That is this piece's argued reading of the pattern, not a claim that serious offenders never face court, and not a claim that any individual named here escaped a concluded case.

This field note draws on public HMRC statistics and accounts, NAO and PAC reports, parliamentary answers, legislation and court-reported cases. It is provided for general information and is not legal or tax advice.

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