Budget 2026: How well does HMRC really understand your wealth?

HMRC is expanding its use of data, analytics and information sharing to build a more complete picture of wealthy taxpayers’ financial affairs. This article explains what HMRC’s new compliance strategy means, who may be affected, and the practical steps individuals can take to ensure their tax affairs remain well documented and compliant.

HMRC wants to build a more complete picture of wealthy taxpayers’ financial affairs, connecting information about their income, assets, business interests and overseas arrangements. Its new strategy, Modernising HMRC’s approach to wealthy compliance, published alongside the October 2026 Budget, sets out how it intends to do this. For individuals with significant wealth, business interests or internationally connected financial affairs, the practical question is what this greater scrutiny means for them.

We see this as a significant development for wealthy individuals and those with complex financial affairs. HMRC’s use of data to identify tax risks is nothing new. What stands out is its growing ability to connect information from multiple sources and build a more complete picture of an individual’s financial affairs. As the volume of available data continues to increase, it is becoming increasingly important to understand how different aspects of a person’s financial arrangements may be viewed collectively rather than in isolation.

The scale is considerable. HMRC identifies around 1.3 million individuals as wealthy taxpayers, contributing approximately £160 billion in tax receipts in 2025/26. It estimates the wealthy tax gap, the difference between the tax due and the amount paid, at £3.6 billion for 2024/25.

Building a more complete picture of wealth

One of the more significant aspects of the strategy is the extent to which HMRC is looking beyond the information contained in an individual’s tax return. It wants to build a more connected picture of personal wealth, including business interests, investments, trusts, partnerships, property and offshore arrangements.

This is increasingly possible through the information available from a range of different sources. The Trust Registration Service (TRS), Register of Overseas Entities (ROE), Companies House and property ownership records all provide information which may help HMRC understand how assets are held and who ultimately benefits from them.

Add to this the information exchanged internationally under the Common Reporting Standard (CRS), and the forthcoming expansion of reporting through the Crypto-Asset Reporting Framework (CARF), and it is clear that the information available to tax authorities is continuing to grow.

HMRC expects to make use of CARF and enhanced CRS data from 2027, with international exchange of information about overseas real estate planned from 2030. These developments will extend the information available to tax authorities, although they should not be taken to mean that HMRC already has a complete picture of every individual’s worldwide assets.

Connecting the information

The significance is not necessarily any one of these reporting systems in isolation, but the ability to connect information from different sources and identify potential inconsistencies. HMRC’s increasing use of data analytics, automated processes and artificial intelligence will further enhance its ability to do this.

For individuals with overseas investments, property, business interests or more complex family structures, this is particularly relevant. Arrangements which may have been considered separately in the past are increasingly likely to be viewed as part of an individual’s overall financial picture.

HMRC’s existing focus on wealthy taxpayers is already producing substantial results. Its compliance work generated £5.2 billion in additional tax revenue in 2023/24, compared with £2.2 billion in 2019/20. These figures predate the new strategy, but illustrate the scale of its work in this area.

HMRC is already engaging directly with wealthy individuals

Importantly, HMRC has already started putting some of this approach into practice.

There have been reports of wealthy individuals receiving letters seeking further information about their sources of wealth, business interests and wider financial arrangements.

HMRC has also been developing its use of voluntary pre-filing discussions, inviting selected taxpayers with complex affairs to speak with a Customer Compliance Manager (CCM) before submitting their Self Assessment tax returns.

Under the new strategy, every identified billionaire with a UK tax footprint, numbering more than 200 individuals, has been allocated a dedicated CCM and offered a voluntary discussion. This is a specific initiative for that group, rather than a new arrangement applying to all wealthy taxpayers.

It reflects HMRC’s intention to encourage earlier engagement and, where possible, address potential issues before they develop into formal compliance enquiries.

A voluntary pre-filing discussion with HMRC should not, however, be regarded as advance clearance of a tax position or a guarantee that HMRC will not subsequently open an enquiry.

If you receive one of these letters, it is important not to panic, but equally not to ignore it.

Receiving correspondence does not automatically mean HMRC suspects something is wrong. However, it is worth understanding exactly what HMRC is asking for and whether the correspondence represents a voluntary invitation or a formal request for information.

Taking advice before responding can help ensure that the position is properly understood and that any response is accurate and appropriately supported.

It is also worth remembering that being classified as a wealthy taxpayer does not automatically mean being regarded as high risk.

HMRC’s definition encompasses individuals with income exceeding £200,000 or assets exceeding £2 million in any of the previous three years. That is a broad population, encompassing entrepreneurs, business owners, investors, retirees and internationally mobile individuals, all with very different financial circumstances.

If you receive one of these letters, it is important not to panic, but equally not to ignore it.

Receiving correspondence does not automatically mean HMRC suspects something is wrong. However, it is worth understanding exactly what HMRC is asking for and whether the correspondence represents a voluntary invitation or a formal request for information.

Taking advice before responding can help ensure that the position is properly understood and that any response is accurate and appropriately supported.

It is also worth remembering that being classified as a wealthy taxpayer does not automatically mean being regarded as high risk.

HMRC’s definition encompasses individuals with income exceeding £200,000 or assets exceeding £2 million in any of the previous three years. That is a broad population, encompassing entrepreneurs, business owners, investors, retirees and internationally mobile individuals, all with very different financial circumstances.

The important message is that individuals should have a clear understanding of their overall financial and tax position, particularly where their affairs involve different asset classes, jurisdictions or ownership structures.

HMRC’s strategy should not be interpreted as suggesting that wealthy individuals are automatically under suspicion. However, its ability to obtain, analyse and connect information is changing, and that makes it increasingly important to have confidence that your tax affairs are in order and that you can explain and support the positions taken.

This is likely to be an increasingly important consideration for wealthy individuals and their families, and one that we expect to see attract much greater attention over the coming years.

As HMRC increases its focus on wealthy taxpayers and makes greater use of data-driven compliance activity, now is an opportune time to review your financial affairs and ensure your tax position is well understood and appropriately documented. If you would like tailored advice on managing tax risk, responding to HMRC enquiries or navigating complex UK and international tax matters, our Private Client team would be pleased to help.

Budget 2026: FAQs for Wealthy Taxpayers

HMRC believes it can reduce the “tax gap” by improving its understanding of wealthy individuals’ financial affairs. Its new strategy aims to bring together information on income, assets, business interests, trusts, property holdings and overseas arrangements to identify potential compliance risks more effectively.

In many cases, yes. HMRC already receives information from sources such as the Trust Registration Service (TRS), Companies House, property records and international reporting frameworks including the Common Reporting Standard (CRS). Further reporting requirements, including the Crypto-Asset Reporting Framework (CARF), are expected to expand the information available to tax authorities over the coming years.

Not necessarily. HMRC’s correspondence may simply be part of its efforts to better understand an individual’s financial affairs. However, it is important to understand the nature of any request, whether it is voluntary or formal, and to ensure that any response is accurate and appropriately supported.

HMRC’s definition is broader than many people might expect. Generally, it includes individuals with income exceeding £200,000 or assets exceeding £2 million in any of the previous three years. This covers a wide range of people, including business owners, entrepreneurs, investors, retirees and internationally mobile individuals.

Individuals should ensure they have a clear understanding of their overall financial and tax position, particularly where their affairs involve multiple asset classes, ownership structures or jurisdictions. As HMRC becomes increasingly able to connect information from different sources, it is becoming more important to be able to explain and support the positions taken in tax returns and other filings.