The UK government is devoting an additional 2,250 tax inspectors to prevent high-rate income taxpayers from trying to dodge it, a fact which puts affluent individuals on notice to get their affairs in order, law firm McGrigors says.

The top 50 per cent rate, levied on annual earnings of £150,000 ($236,000) or more, was introduced by the previous Labour government and the current Conservative/Liberal Democrat coalition government may phase it out. Economists have argued that the higher marginal rate actually reduces revenues by encouraging avoidance and reducing incentives.

Danny Alexander, chief secretary to the Treasury and a Lib Dem member of the government, has announced that additional tax inspectors, of whom half will be new recruits, are to be hired.

“A large number of these will be deployed to target taxpayers who are categorised as 'affluent' - broadly those earning enough to fall within the 50 per cent tax bracket - and those who have accumulated substantial assets. The aim is to recover an additional £2 billion of tax, which the Coalition government asserts ought to have been paid, over the course of the current Parliamentary term,” McGrigors said.

Such tax crackdowns are controversial because, in addition to arguments about whether higher rates reduce rather than increase revenues is the cost in salaries and time of hiring more tax inspectors.

The law firm has revealed, following a Freedom of Information request, that HM Revenue & Customs, the UK tax authority, has “substantially increased” the yield from high net worth taxpayers, and was on course to recover £85 million in the 2010-11 tax year, up from £25 million the previous year.

“This announcement follows that made at last year’s conference about the five-fold increase in prosecutions. We have already seen a marked increase in criminal investigations by HMRC, so the chief secretary is clearly a man of his word. What this new announcement means is that HMRC will now be really cracking down on avoidance,” said James Bullock, tax partner and head of litigation and regulatory at McGrigors.

“We can also expect a much more robust approach being taken with people who have bought marketed tax products or who have implemented tax planning schemes,” he said.  In many cases, the amounts in dispute may not be that large - thousands, rather than hundreds of thousands of pounds. But because taking a dispute to the Tax Tribunal is expensive, HMRC may be expecting many such taxpayers to cave in quickly if challenged.”