HMRC has issued a press release as a result of this morning's revelations on HSBC. As an exercise in missing the point it's a classic. They say:
We have systematically worked through all the Lagarde data. As a result tax, interest and penalties have now been paid by those who hid their assets in Switzerland to get out of paying tax. The decision to prosecute is made by the Crown Prosecution Service based on the facts.
The Lagarde list was used by HMRC for the express purpose for which it was provided — to assess, collect, enforce and prosecute tax offences. We have brought in more than £135 million as a result of this work and the government has increased the maximum penalty for hiding money in tax havens to 200% of the tax evaded. Over 90 countries have committed to new international Common Reporting Standards, further shutting down the options for tax cheats who pursue this increasingly high risk practice.
We use information provided by whistleblowers as part of our commitment to tackle offshore tax evasion. To date, our agreements with Switzerland and Liechtenstein alone have brought in around £2 billion in previously unpaid tax.
This leaves questions unanswered.
First, as Margaret Hodge has confirmed this morning, HMRC when giving evidence to her committee not so long ago said they had contacted just one in six people on the Lagarde list of those who were UK resident but had funds in HSBC Switzerland. How can HMRC be sure then that all tax, interest and penalties have been paid? That seems to be impossible to me.
Second, why has so little money been collected? It was thought those involved had many billions in their accounts. This needs explanation.
Third, it's not that the Swiss and Liechtenstein deals have collected money that matters as much as the fact that they have done so in ways that have guaranteed criminals anonymity. HMRC still need to explain why letting criminals off is such a good idea, and they have not.
HMRC have a lot more to say as yet.
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If the maximum penalty for dodging tax is 200% of the unpaid tax, and they are only chasing one in six of the people they actually know about, and even then, another body has to be convinced to bring a prosecution, it strikes me that for a betting individual of considerable wealth and resources, those are really quite favourable odds…..
And that’s the problem
Government and public servants have betrayed public need on this – https://jeffkaye.wordpress.com/2015/02/09/so-and-sos-how-some-banks-con/. David Gauke states that Stephen Green did not know specifically what was going on (he was only CEO) and blames Ed Balls – who was far further from the evidence! HMRC and this Government then made a deal that wrapped the Swiss, HBSC and the those evading tax in cotton wool. This shows a national culture of government in hock to such as the banks and public servants who are too weak to serve with any real validity. This is why UKIP get votes – Governments unfortunately out of touch with the mass of people who have suffered since 2007/8.
Agreed Jeff
The blaming Ed Balls attempt was really bizarre
His crime was thinking banks did not commit crimes
David Gauke did know they did and yet in 2012 decided it was not in the public interest to prosecute them
That phrase “Not in the Public Interest to Prosecute” has been heard far too much recently. When is it going to change?
In my view, it is not surprising that HMRC seem to think like this.
They obviously revere the rich (as all good Englishmen are taught to do in a class based system that was rumoured to have died but never really did)) and therefore wish to treat the well off differently to everyone else.
This difference of treatment is the same old blue collar verusus white collar discrimination we still see in the legal sysem at large.
In other words we will send you to prison if you don’t pay your TV license but we’ll negotiate with you if you’ve fiddled your tax returns and can employ an expensive lawyer.
Because ‘Her Majesty’ sits at the top of all this, i think that the HMRC should be renamed ‘The Citizens Customs and Revenue’ or (dare I say it) ‘The People’s Revenue and Customs’. Who knows – it may have a positive impact on HMRS’s current money defferential culture?
I would imagine the first thing they did was check the list against a list of people that had indicated non-dom status on their tax return. If the individual was a non-dom they probably didn’t bother to do very much at all because a non-dom doesn’t have to declare the account. That could explain why the list was less useful to the UK than some of those other countries that tax everything.
I suspect the amount of tax collected was so small because it was concluded that the only thing avoided was tax on bank interest. I am sure HMRC would have asked where the funds came from in the first place to check they had been taxed. It is much easier for people to squirrel away some of their post-tax funds.
Complete speculation
And wrong in many ways on non doms
I should have been clearer and said a non-dom isn’t obliged to declare an offshore bank account, unless there is some sort of taxable remittance. That could quite easily cover a lot of UK resident people on a list.
I am speculating that HMRC are competent enough to ask the really obvious questions.
But they wouldn’t if they did not have the resources to handle 7,000 answers
And that will have been the real issue