Exploring wealthy customers’ views on links between their personal and mid-sized business tax compliance behaviours

As a small business owner and financial adviser, I find HMRC’s findings far from surprising. Sole owners of smaller businesses naturally view their personal and business finances as interconnected—it’s often the same pot. From a tax planning perspective, that’s actually a very sensible approach. The link between risk attitudes in personal and business tax behaviour also makes perfect sense. Those who prefer the safety of salaried roles tend to be more risk-averse, while entrepreneurs comfortable with business risk are typically more open to taking investment and tax planning risks too.

There is a revealing disconnect in this complex issue in HMRC’s wealthy taxpayer study. Personal compliance is a moral duty, but business taxes are a game, with loopholes like FICs exploited. This drives non-compliance. HMRC’s 2023-24 yield from the wealthy was £5.2bn, yet the tax gap may top £1.9bn. In a 0.75% growth, 3.5% inflation economy, this strains public funds. The report’s “customer” framing feels off—taxpayers aren’t clients, they’re citizens, and HMRC’s language risks downplaying evasion. Tougher enforcement, not just understanding attitudes, is needed for fairness across all income levels.