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.