HMRC has confirmed that households face average bills of £27,140 after closing 9,800 investigations into capital gains tax (CGT) non-compliance during the 2024-25 tax year. The tax authority clawed back a total of £266 million from CGT as it intensifies compliance checks following Labour Chancellor Rachel Reeves’ rate increases in her first Budget in 2024.
Average Repayment and Investigation Details
According to a Freedom of Information (FOI) request made by tax consultancy Lubbock Fine, the average amount repaid per investigation stood at £27,140. The FOI revealed that HMRC has significantly stepped up its enforcement activities, targeting individuals and families who may have underreported or failed to declare capital gains.
The crackdown comes after Chancellor Rachel Reeves raised both the lower and higher rates of CGT in her October 2024 Budget, widening the scope of taxpayers who now have a potential reporting obligation.
Expert Commentary on Increased Scrutiny
Rachael Griffin, a wealth manager at Quilter, commented: “Far more people now have a potential reporting obligation, including those who may never previously have had to think about CGT. As a result, some individuals may be finding themselves caught out simply because they are unaware of the rules.”
She added: “At the same time, HMRC has significantly improved its ability to identify discrepancies through increased data sharing and digital reporting. Investment platforms, estate agents, conveyancers and other financial institutions provide information that can be cross-checked against tax returns, making it increasingly difficult for gains to go unreported.”
Aggressive Pursuit of Wealth Transfers and Crypto Gains
Graham Caddock, of accountancy firm Lubbock Fine, said HMRC was “doing everything it can to ensure it collects every penny it can from those trying to reduce their capital gains.” He noted that “families are increasingly finding that passing on wealth is no longer a straightforward exercise. HMRC is scrutinising these transactions far more aggressively.”
Mr Caddock also highlighted the agency’s focus on cryptocurrency gains: “Cryptocurrencies were renowned for being the ‘wild west’ of investing. For many crypto investors, this categorisation has stuck and many underestimate how seriously HMRC treats undeclared gains. Even worse, some crypto investors think that gains made through digital assets somehow sit outside the normal tax rules, which is exactly why HMRC is targeting the sector so aggressively.”
Advice for Taxpayers
Ms Griffin advised: “Anyone who has sold investments outside an Isa or pension, disposed of a second property, or made other taxable gains should ensure they understand their reporting obligations. HMRC has shown it is willing to pursue non-compliance, and the cost of correcting mistakes after an investigation can be substantially higher than seeking advice and getting it right from the outset.”
