Capital gains tax (CGT) revenues have increased 23% in the last two years, despite falling numbers of enquiries, according to research by a chartered accountants.
Data obtained by UHY Hacker Young from HM Revenue & Customs (HMRC) under the Freedom of Information Act shows CGT investigations raked in £73.6m in 2009/10, up from £59.7m in 2007/8.
The yield achieved per CGT investigation has also soared, up 79% from £6,000 in 2007/8 to £10,800 in 2009/10.
This is despite the number of enquiries into CGT falling 31% from 9,900 in 2007/8 to 6,800 in 2009/10.
UHY Hacker Young says its findings are surprising as the amount of CGT HMRC calculates is payable has more than halved (-53%) over the same period.
CGT revenue fell from £5.3bn in 2007/8 to £2.5bn in 2009/10 as the recession took its toll, the official figures show.
Tax partner at the firm, Roy Maugham, says the findings demonstrate how aggressive HMRC is becoming in tackling tax evasion in this area.
"This is a massive increase in CGT from enquiry work, particularly as the amount of CGT payable has collapsed as asset values slumped during the recession.
"With an increase in CGT a probable outcome of the emergency Budget, we expect this to go hand in hand with more aggressive compliance work to counteract the subsequent surge in CGT avoidance and evasion it might bring."
He says with huge pressure on HMRC to maximise tax receipts to contribute to reducing the public deficit, it is likely to step up activity to another level in the coming years.
Maugham says his research suggests HMRC's specialist CGT team has been trawling Land Registry data in a systematic manner, using this information to identify residential property sales by buy-to-let investors.
He says gains on property transactions are a particular area of attention for HMRC.
"Other enquiries involve HMRC challenging whether a property is really a taxpayer's main residence and, therefore, exempt from CGT."
One area where taxpayers often make mistakes is when claiming the cost of work carried out on property against CGT bills, he says.
"Whilst taxpayers are allowed to deduct the cost of work on a property from their CGT bill, such work must be considered ‘enhancement expenditure' and not maintenance.
He says many HMRC investigations lead to disagreements over whether some costs are repair costs or enhancement to the property.
"HMRC often challenges the records for expenditure going back 20 years or more."
On Sunday, Chancellor George Osborne confirmed CGT would rise in Tuesday's Budget, despite free market think tank the Adam Smith Institute warning it could actually cost the Government as much as £2.48bn in lost revenues.
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Reporting to Steve Hill
Appointed on 19 September