HM Revenue & Customs' (HMRC) Fraud Investigation Service (FIS) secured 260 convictions against serious tax evaders in the 2025-26 tax year, the agency reported. The FIS, described as the 'Premier League' of HMRC investigators, is responsible for criminal and civil investigations into complex and sophisticated fraud.
Overall, HMRC initiated 300 prosecutions against tax evaders during the same period, with 1,100 individuals currently awaiting trial. Tax fraud encompasses a range of illicit activities, including the submission of false tax returns, fraudulent claims for repayments or reliefs, offshore income concealment, and the smuggling of taxable goods. HMRC stated that while some tax evasion is carried out by individuals, organized criminals also deliberately target the tax system for financial gain.
Criminal Investigations and Recovered Funds
The FIS focuses on the most harmful, complex, and sophisticated frauds, with criminal investigations often taking years to conclude. In the 2025-26 tax year, the agency reported an 87% success rate in prosecutions brought forward, with 494 criminal investigations launched, marking a 10.8% increase from the previous year's 446. Forty individuals were acquitted.
The amount of tax collected through criminal investigations saw a significant increase of 39%, reaching £2.1 billion, up from £1.52 billion in the prior tax year. The average investigation in the last tax year recovered approximately £4.3 million, an increase of nearly £1 million compared to the previous year's average of £3.4 million.
Proposed Changes to Debt Collection Powers
Concurrently, HMRC is seeking to enhance its powers to collect lower amounts of tax debt, including the potential to raid bank accounts. Current regulations permit HMRC to seize funds directly from bank accounts for debts exceeding £1,000, provided the individual retains more than £5,000 after the debt is settled. New proposals, if approved, would enable HMRC to recover smaller debts through direct bank account withdrawals without the £5,000 minimum balance requirement.
These efforts align with the Treasury's objective to increase tax revenue in the UK. According to the International Monetary Fund, the UK's tax burden is projected to rise from 37.6% of national income in 2024 to 42.1% by 2031, a level not seen in peacetime and equivalent to an additional £130 billion annually, or approximately £4,500 per household.