Comment has been growing steadily in the media on plans that H M Revenue & Customs should be given access to all bank account information for all people resident in the UK.
I warmly welcome this move.
We face a bill for £70 billion a year with regard to tax evasion in the UK. That’s my estimate, I admit. HMRC think it a more ,modest £35 billion, but their data has to be wrong: the basis of calculation is completely methodologically flawed with regard to all taxes bar VAT.
Whichever way it is looked at tax evasion costs between 42% and 84% of the deficit George Osborne says he wants to close. We are facing massive cuts in public services to close that gap — unnecessarily in my opinion when it is so obvious that tackling the crooks who perpetrate tax evasion and the cheats who undertake the additional £25 billion of tax avoidance that the economy also suffers each year could meet the bill.
In this context giving access to bank account information to HMRC is very obviously the right thing to do. There is no invasion of privacy: HMRC have a duty to not disclose this data and y6es, I know they have made some data errors in their time but they are vastly fewer in number than those of our major banks, and have not involved disclosure of income details or tax return data. And in any event, the risk is a price well worth paying. To provide HMRC with the opportunity to correlate bank data with tax return data permits a much enhanced risk assessment service with regard to the opening of tax evasion enquiries. That will, in itself, mean that the deterrent effect will be considerable, and that is welcome.
I do though add two thoughts. The first is that at present banks in Jersey, Guernsey and the Isle of Man are included in the UK bank clearing system. This must be stopped or the attraction of locating bank accounts in these places to avoid disclosure to HMRC will increase.
Second, the scheme must extend to all limited companies where I think a considerable part of the tax evasion takes place.
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It does seem odd that the CIA have had access to our bank accounts for years and yet Her Majesty’s Revenue and Customs has been denied this information.
@RichardSM
Great point!
Richard,
One quibble. The banks here have two quite separate operations – one for offshore, the other for legitimate local residents. Being selfish, I’ve no objection to the offshore accounts being outside the clearing system, but I think that taking the local accounts out of clearing would make life both more inconvenient and more expensive.
James in Jersey
If HMRC have reason to suspect evasion they have the power to apply to a judge to allow access to bank accounts through a section 20 notice. Giving HMRC (or any other government agency) access to such personal data without just cause and appropriate safeguards (such as a magistrate or judge) is anathema to our country’s values of freedom and democracy
@Richard
Come on
That’s one in 500,000
Zero deterrent effect
And we have £70 bn of tax evasion
Please get real
There’s no abuse of privacy here – just data to ensure that there is tax compliance
Many years ago I did a very short stint in a branch of barclays bank, you could basically look up and pull off a statement or account statistics on anyone you liked, including all the other staff at the bank and other branches, it was fairly common for people to nosey around, I dont see what the difference in letting the HRMC have a go as the bank are already snooping at your details ….
Aren’t Guernsey going to disclose information (from next year) of bank account holders under the EUSD?
@Richard Murphy
its a lot more than an abuse of privacy.
But ignoring this important point – HMRC are not able to operate properly under the system we have now, so what on earth makes anyone think they would be in a position to make sense of the trillions of transactions they would suddenly have access to.
@alastair
You may have noticed that I am campaigning for 20,000 extra members of staff aat HM Revenue and Customs.No coincidence, you might think