The FT has an article today on the requirement that tax advisers write by the end of this month to all their clients who they believe might have had offshore bank accounts to warn that HMRC is about to receive significant new information straight from tax havens on accounts that might be held there.
I am well aware that many advisers resent this letter because its content is largely dictared by HMRC requirements.
Others resent it because it makes it look as if the adviser is cooperating with HMRC. They think that will backfire in terms of voluntary compliance.
I do not share these concerns. I welcome the requirement, as I welcome automatic information exchange from tax havens, which I campaigned for when the idea was considered absurd.
I do have a doubt though, and that is HMRC's ability to follow up on this. We do not know how much information HMRC will receive as yet. Nor do we know its quality. But what we do know is that HMRC will receive it whilst undergoing a pointless and costly physical reorganisation of premises in the course of which thousands of jobs will be shed. My concern in that case is simply that the data will not be used. And, if the belief that this exercise is a paper tiger spreads as a result the behavioural response on which HMRC are most relying will not materialise.
HMRC have imposed a massive admin exercise on tax advisers. I am not arguing with their right to do that. But the evidence is that HMRC may not have the resources to deal with the consequences. And that worries me, a lot.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Who sir? Not me sir! Honest. It must have been a mistake.
This looks like window dressing to me.
The Tories are so desperate to retain power this looks like populism to me. Let’s see what happens. But your point about HMRC’s capacity to meaningfully follow this exercise up is a salient point.
Hi Richard
As you may recall the PSG has been in dispute with the Crown Dependencies (principally the Isle of Man) for over 16 years. This involves regular contact (sometimes on a weekly basis) which in turn has accumulated a huge number of emails, letters and phone calls!
Over the years nothing has changed and no matter what highly paid spin doctors may announce to the world to conceal the Machiavellian activities of the island’s financial services industry the so-called “government” continues to be party to financial chicanery. Every word emanating from these islands is questionable and when combined with the lethargy (real or invented) entrenched in the HMRC the “automatic information exchange” mechanism becomes farcical.
In short one or both sides are crooks.
Not sure if you will publish this … but we value the tremendous support you gave us in the early days of our “campaign” and this still provides us with the residual energy to continue our campaign for justice.
Stay safe.
N
Thanks
Keep at it