HMRC is making fewer demands for information to tackle offshore tax cheats

Posted on March 25 2015

International Tax Adviser has given publicity to Pinsent Masons in their secondary role as HMRC's press agency, noting;

During the 2012-13 tax year, the Revenue made nearly 500 information requests to tax authorities to find out the value of taxpayers' assets situated overseas. This was a sharp decrease compared to the 2011-12 tax year, in which Britain's tax office made 640 enquiries, and a further fall compared to the 2010-11 tax year.
The figures come from international law firm, Pinsent Masons, which said the requests were made under double taxation agreements (DTAs), of which HMRC has one of the largest networks in the world.
The results also indicate that HMRC received 2,466 information requests to help foreign tax authorities with their own investigations into tax evasion.

857 requests for data were made on 2010-11.

So, as the focus on offshore tax abuse increased, and as the number of tax information exchange agreements we had with tax havens grew rapidly there has a been a decline in the number of requests for information on UK tax payers with overseas interests of 43% over two years.

This is not the sign of a tax authority on top of its brief.

Nor of a tax authority wishing to make use of the data that is available to it.

This is a sign of a tax authority with insufficient resources.

And a tax authority that does not care about these issues.

Or both.

And that sends a very powerful signal to those abusing that their chances of getting away with it are still very high indeed.

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8 Responses

  1. Andrew says:
    March 25 2015 at 7:33 am

    Perhaps it is a sign that more information is being provided spontaneously or automatically, rather than HMRC having to make a request?

    “AEOI” (automatic exchange of information) is what initiatives such as the EU Savings Tax Directive, the extended Directive on Administrative Cooperation, FATCA, the UK’s information exchange agreements with Crown and Dependent Overseas Territories, the OECD’s Common Reporting Standard, etc, require. I would not be at all surprised if the number of requests fall significantly in the next few years, as HMRC works out how to deal with the deluge of information coming their way. More information is not necessarily helpful, if you don’t have a reliable way to sort the wheat from the chaff.

    • Richard Murphy says:
      March 25 2015 at 12:07 pm

      It is rare that AIE creates sufficient data to solve a case

      Instead it creates the smoking gun to open one

      I would have expected requests to have increased, substantially

  2. Ivan Horrocks says:
    March 25 2015 at 9:37 am

    Perhaps this excerpt below (from the HMRC web site) explains it, Richard, Except that the focus seems to be on the first part of the equation (making it easy and reducing costs for their customers – well, big business and high net worth customers), while deliberately pursuing an HR policy that undermines the second part.

    As an aside, I was mystified as to what “products” HMRC produces.

    ‘The issue

    HMRC wants to make it easy for customers to deal with their taxes and get things right, by making our products and processes more simple and straightforward, and by improving our customer service.

    This will reduce the costs for HMRC customers, including businesses, and help make sure that the right taxes and revenues are collected and paid.’

  3. Mark Crown says:
    March 25 2015 at 9:01 pm

    I’ve started to cross over the border into Jolyon Maugham’s blog.

    Has anyone seen this:

    http://waitingfortax.com/2015/03/22/why-so-few-prosecutions-of-offshore-tax-evaders/

    So, not only are we going to continue to hollow out HMRC but we will also see politicians authorise deals like this – so here’s why the low numbers at HMRC will be kept low – because there’s nothing for them to do because of deals like this!!

    I read this and once again it made me feel like a fool. But not just me – all of those who just try to go out to work and make an honest living.

    I tell you this – I’m finished with the Labour party – that’s it – I’m done. I’ve had to hear them talking crap about keeping schools open until later so that they can effectively be used as storage for kids whose parents are on ‘flexible contracts’; I’ve heard them refusing to put up NI when the NHS needs a cash injection and as to their other pledges – all aimed at certain ‘segments’ of the voting public – its absolute tosh.

    To quote a certain American movie ‘I’m as mad as hell and I’m not going to take it any more!’