Hartnett, tax evasion and where the UK goes next

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Forbes has published a profile of Dave Hartnett, the Permanent Secretary within the UK Civil Service responsible for HM Revenue & Customs. They say:

Dave Hartnett is taking strength from a baying crowd. As governments around the world call more loudly for a clampdown on tax evasion, [he] is doing all he can to stop wealthy Brits from hiding their money in tax havens. Having shifted to "Dave" from "David" a decade ago, his informality and aggressive persona may well have aided crucial negotiations to drive through the clampdown.

Hartnett, who led the team that brokered the deal, says it took 14 months of talks, some taking place in the home of the British ambassador to Switzerland, to gain the trust of Liechtenstein's authorities. Now he expects to rake back 1 billion pounds ($1.7 billion) in lost tax revenues over the next five years as a result of the agreement.

As they note:

Hartnett, who became a tax inspector soon after graduating from Birmingham University with a degree in Latin, is known in the financial industry for his hard-line stance on tax evasion. "We want people to pay their fair share," he says. "Rather like most other countries we've got hospitals and schools to build, we've got welfare payments to make."

And they sought third party evidence:

"He's the hardest tax negotiator the Revenue has ever had," said Richard Murphy of British consultancy Tax Research. "Don't argue with him."

But so what? What’s next?:

Harnett hopes the Liechtenstein deal can be copied with other countries, and says his department would be prepared to help facilitate the discussions. "The U.K. wants to make a big contribution to tax compliance generally." Hard to argue with that.

True, but I do know that there are those in his department who are not, shall we say, wholly committed to the cause. Certainly any mention of Automatic Information Exchange goes down like a lead balloon with some at HM Treasury, where he is based. And that is not helpful right now because if the Liechtenstein deal proves anything it is that Dave Hartnett believes that Tax Information Exchange Agreements cannot deliver by themselves.

We’re looking for more from the UK at the OECD Mexico meeting as a result.


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