Data supplied by HMRC also shows that returns on investment into tax investigations is up significantly across HMRC’s key high net worth units and the local compliance unit which investigates individual taxpayers and small businesses.

Both the local compliance and high net worth units collected approximately £18 for every £1 invested in 2013/14, up from £16 the previous year.

Both units have witnessed efficiency improvements over the last four years. In 2009/10, £14 was collected for every £1 spent by the local compliance unit and only £6 gathered for every £1 spent by the high net worth unit.

James Bullock, head of litigation and compliance at Pinsent Masons, described HMRC’s returns on its increased investments into tax investigations as ‘mouth-watering’ and said:  ‘These numbers suggests that, for the foreseeable future, HMRC will be increasing investment in investigations as quickly as it can hire and train staff.’

'Securing £5.9bn in extra tax from investigations into large businesses for expenditure on compliance staff of just £61m means the Chancellor is getting tremendous value from these teams. It also suggests that additional funding for investigation will focus on investigations into medium sized and larger businesses,’ Bullock predicted.

However, the firm’s research indicates that the increased yields may also be causing some additional issues for business, as they have been accompanied by an increased backlog in disputes and appeals waiting to be heard at tribunals, which Pinsent Masons says currently stands at a record high of 27,246.

There has been a 32% increase in the number of high value disputes lodged with the Upper Tax Tribunals with 267 cases joining the queue. This compares with the situation five years ago when 70 new cases were lodged with the Upper Tribunal. 

Bullock said: ‘A long wait for a tribunal case to be heard is not as much of an issue for HMRC as it is for a taxpayer that has already had to pay the tax that is in dispute To achieve a more reasonable time frame for tax cases, HMRC needs to adopt a more pragmatic approach and start negotiating deals. The Treasury has been providing the funding for tax investigations but it now needs to give political support to HMRC in dealing with the backlog.’

Separate research from UHY Hacker Young backs up the view that HMRC is becoming more focused in its investigation work. Its analysis shows HMRC probes into individuals and small businesses produced record-high £136m in additional Capital Gains Tax (CGT) in 2013-14.

The firm calculates this was up 24% on the £110m collected in 2012-13, which was itself up 32% on the £83m extra collected in 2011-12. UHY Hacker Young says much of the CGT increase is down to targeting property transactions and particularly buy-to-let investors.

Mark Giddens, tax partner and head of the London private client team at UHY Hacker Young said: ‘There are a significantly greater number of buy to let landlords and private property investors in the UK than was the case 10 years ago, and they make tempting targets. Investigations into SMES and individuals are now a focus of the organisation is a way that that was not the case in previous incarnations. Additionally we are seeing a more hardnosed attitude in HMRC’s approach to investigations.’