HM Revenue & Customs reported this week that:
In 2018, HMRC received information about the offshore financial interests of around 3 million UK resident individuals, or entities they control. We have begun using this data to detect possible non-compliance.
Let's put this in context. Apparently, one in ten UK taxpayers has an offshore account.
I have always argued the scale of offshore abuse is significant. But this exceeds any estimate that I might have made.
The data has been advised by foreign governments. I suspect it is true.
Let me be clear: some will be accounts that are not in tax havens e.g. those held by those letting properties in France, for example. But all might involve evasion. And that is just as important as those that are tax haven based.
I have related the story before, but in June 2009 I was told by the Treasury that this type of information exchange would not happen in my lifetime. I, and others, campaigned for it despite that. I wrote about it.
And as has so often been the case, it has now been proven that we were right to do so.
Now I hope the money flows to HMRC.
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Richard
How likely is it that there is actually a much smaller number of people, but with multiple accounts?
The seriously rich will not place their trust in just one tax haven, but spread their wealth across continents
Possible…
But 3 million separate names have so far been supplied
“But all might involve evasion”
Do you have any evidence for this? Or actual statistics on how many of these people or accounts are involved in tax evasion?
Did you notice the word might?
No, using a qualifier like “might” is a total cop out when your article is otherwise saying offshore tax evasion is rife. Like the following line:
“I have always argued the scale of offshore abuse is significant. But this exceeds any estimate that I might have made.”
So what exactly are your estimates of these offshore bank accounts being used for tax evasion? How big is “offshore abuse”. If you don’t have a real estimate, and are just claiming lots of them are used for tax evasion, then what you are really doing is creating a straw man argument. It’s a smear with authoritarian undertones.
Also, to compare, how much UK tax evasion was found in the Swiss disclosures, which you also said would contain huge amounts?
The reality of the situation is though that there are about 3.8m EU citizens in the UK, let alone people from the rest of the world. Is it really that surprising that there are millions of UK resident people with foreign bank accounts simply on the basis that those people will have had accounts in other home countries before they moved to the UK and won’t have closed them.
This has always been the story
There is no abuse here it is said
Except there is, time and again
I have no doubt at all many of these accounts are used quite innocently – hence my appropriate choice of words
But your assumption that there is no abuse is absurd in the face of the very obvious evidence found time and again that there is
And upholding the law is not authoritarian – it is what those who believe in society (which is the vast majority of us) require
So very politely, I am happy for all who are innocent to prove the fact. I want not a penny paid that is not due
As for the rest – I hope the penalties are significant
“I have no doubt at all many of these accounts are used quite innocently”
How many? What percentage? How much tax could be recovered?
Just saying “lots”, “high”, “lots” are not real answers. I want real, numerical estimates because otherwise you can simply wriggle out when your answers turn out to be nonsense.
The Swiss bank leaks found UK citizens holding £22bn. Do you know how much was actually recovered by HMRC from this amount? £135m. So around 0.5% of the total, and not the huge amounts you yourself were claiming.
What you are doing is using vague language to impugn a large group, with the end goal being more control for another group of people.
I never said there was no abuse, but you are making it out that there is lots of abuse, and therefore the government should have more access and control over our private data and private lives. That is authoritarian by it’s very definition.
So, for the record, is this:
“So very politely, I am happy for all who are innocent to prove the fact”
It’s innocent until proven guilty. You want to make it guilty until proven innocent – which says a lot about you.
Of course I do not know the answer: I have not got the data. Please do not be silly.
But the point is we do know there is offshore abuse. Let’s not be silly and pretend otherwise.
But your attitude is that in the face of crime we turn a blind eye
I say we uphold the law.
My approach is to uphold society.
Yours is to undermine it.
Do I need to say more?
Richard
Your tactic of asking people to prove a negative is stale. It’s impossible, as you well know. Let CRS do its job. It is working. People are not hiding money and not declaring income in anything like the numbers that you think . Many are holding funds offshore and fully declaring them as required by laws. That’s why the Swiss amnesty produced so little extra tax. That’s why CRS is producing so little extra tax.
Because notice was given so they stopped abusing or moved on
So CRS is working
And as you have noted, offshore is losing
Which was the aim
Well clearly we do, because you don’t understand the law.
The law is innocent until proven guilty. Not the other way around.
There probably is some offshore abuse, but that does not give you the right or the information to claim there is lots of it, and therefore we should collect everybodys data.
You are simply assuming large numbers of these people are foreign bank accounts are evading tax, with no evidence. Then saying that they should be considered guilty until proving their innocence.
By your logic I am going to say that you are a tax evader. Some people have used LLPs to evade tax, and you have an LLP. Therefore you are a tax evader until you prove you are innocent. So until you prove you are not breaking the law we should assume you are.
You can assume what you wish
HMRC can check
I am asking that HMRC have the opportunity to check offshore too
No more
You will be deleted in future as a timewaster
A ‘UK taxpayer’ in that figure could easily be an non-UK citizen living and working in the UK who has simply kept their old home bank account open without actually using it for anything while they’re in the UK. There are about 3.5 million non-UK workers according to ONS which would be in line with the number above when you consider which countries have currently signed up to CRS.
And are they declaring that income in the UK?
They certainly aren’t claiming to be non-dom
I had a Norwegian bank account for 35 years. I lived there for a while. I worked there intermittently. I was paid in NOK. Most importantly I declared those earnings to HMRC who taxed me in the UK. Those Norwegian earnings stayed in the Kreditkassen bank account and were spent during the many holidays I took in Norway. Every year I have one week cross country skiing and last year I also took an early summer break there. Summer holidays are harder now because there are no ferries to Scandinavia but to me it is the most beautiful country on earth.
There is no crime in having such an account
But HMRC clearly did not know about many of them
Yes – the ship we sailed to Norway on in 1997 was called the Jupiter and it called at Stavanger and then Bergen where we got off (lovely place). It is a real shame ships don’t sail from Newcastle anymore.
Take the best bits of Scotland, add some steroids and you’ve got Norway – simply outstanding beauty that’s on another scale altogether.
As for the tax issue, I know people on my partners side who use offshore all of the time. All that has happened is that our tax authorities have just not bothered about this.
Richard’s work with his fellow campaigners has made HMRC look lackadaisical to be honest. And why do I care? Because these people are charged money for offshoring their funds – it’s not for free. Over time, the fees add up.
And that charging regime is taking money that could be more socially useful and doing what exactly?
That’s my beef.
Agreed
On Norway
And tax
Interesting response from the critical element….ah, but…. ah, but…. ah, but…
Of course the objections will be valid in some cases, but millions of them ? I don’t think so; and given the information is now available all the government needs to do so we can stop guessing is ensure that that HMRC has adequate resources to investigate and follow-up. Hmmmm…..(?)
this doesn’t surprise me,
a while back Private Eye magazine created a searchable map of properties owned by offshore companies,
http://www.private-eye.co.uk/registry
I checked out my home town and found the new doctors surgery that had been built recently is registered in Guernsey,
I meant to ask my GP why this was but whenever I do visit the doctors I’m seen by a locum, on my last visit the locum actually asked me ‘where are all the doctors?’
it all seems very bizarre.
That is a PFI arrangement
The doctors are very unlikely to own it
I have seen it, often
I do. In fact I have a few (one per currency, £, € and $). My wife and I have banked with Lloyds for decades. When we left the UK, a long time ago, we were advised by Lloyds to take our business elsewhere (offshore). We have owned a home in the UK most of the time we’ve been away (I worked for international organisations) and had a mortgage and other comings and goings financially and a need for a UK bank account. We never had, nor do we now, have anything to hide.
I have met with Lloyds advisors on a couple of occasions, the kind who advise bankers on what to do with their bonuses. Not sure who may have had the most disdain later. Them for my lack of wealth or me for the feeling that they were complicit in helping people avoid paying their fair share. But to be clear, we were pretty much forced into it. We are again non-resident, still with a home and a mortgage.
I commend @ian_fraser’s recent article predicting the death of high street banks. I’d love to be shot of Lloyds, NatWest, RBS etc (I have business with them all).
Bottom line: 1 in 10 may be a bit exaggerated.
You will have seen multiple accounts are covered
Nothing wrong with it, as long as the offshore Finance Centre has a reputation of excellence such as Jersey which has recently been taken off the ‘grey list’.
So there is nothing wrong with waging economic warfare against another state?
Really?
Only there to offer a service Richard not wage a war.
Talking of which, your war against Jersey doesn’t seem to be getting very far!
You seem not to realise that CRS is a success – imposed on you
We are winning, and you know it
Even if it was largely Jersey, which I doubt these data, CRS reporting would be catching it. It cannot be “economic warfare” if it’s being reported and tax is being paid on it.
What I can say, with first hand knowledge, is that lots of UK taxpayers with any degree of wealth have been transferring assets abroad to counter John McDonnell’s proposed “wealth grab” if Corbyn was to get elected. Not tax evasion or tax avoidance, just wealth preservation.
It is the aftermath of the economic warfare you have waged for decades
And still do on many states
By no means all enjoy CRS reporting, as you well know
And which you confirm you still are on the UK – seeking to undermine our democracy in the process
We live in Spain 3-4m of the year so have a local bank account for convenience. In fact everybody I know who spends any amount of time outside the UK does also. No big deal
And is the interest declared?
“And is the interest declared”.. what interest? It’s a current account for convienience not evading tax!!!
Fine
But how many aren’t?
Because no one knows all have to be disclosed
I warmly welcome the CRS automatic information exchange
Richard @10.36am
What do you mean? CRS is fully applied in the CDs.
Because it was forced on you
We agreed to adopt it. All part of the commitment to transparency. There was no resistance to it, and I don’t think anybody in the CD resents it one little bit.
I have one comment
Bollocks
Sterling and USD interest rates of around 1% (if you’re lucky). Negative interest rates on holding Euros.
There’s hardly any interest being earned by anybody these days on which tax could be avoided or evaded!
Oh come on Colin. Stop being silly. Because that’s what you’re being
What feeds thee accounts is not interest, of course
So what else does is what of interest
And I am hoping HMRC have a field day
It would be very interesting to find out where all these overseas accounts are held. Certainly in the Channel Islands the personal banking sectors have shrunk massively over the past few years. The CI arms of the UK high street banks are a shadow of their former selves, and the minimum account balances required at most of the other banks made it virtually impossible for anyone with under £1m to have an account. There’s simply not enough margin available in interest rates for this sector to be viable to the banks.
The Isle of Man still appears to have a sizeable builiding society/expat banking sector but I’m struggling to think of anywhere else where this type of sector still exists.
You guys always express your bewilderment and denial
And yet the evidence is it still goes on
Aided and abetted by the very same people who deny it
What “evidence”? Full CRS reporting happens. Do you really think anybody from the UK would be stupid enough to hide untaxed money in the CDs these days? There is a system in place to catch them and it works.
Not now
Because we forced automatic information exchange on you
We won
You lost
You seem very excited by this yet the level of underpayment of tax on offshore accounts will be tiny compared to the underpayment of tax by the self employed who get paid in cash. I suggest in your pursuit of “fairness” you direct your energy in this area.
Have you never noticed I say more about that than possibly anyone else in the UK?
Obviously not….
What’s the persecution complex for Steve? Guilt, maybe?
You “forced” it on the CDs? No – the CDs studied the wind direction and agreed to adopt it. Best thing they ever did – and the CDs’ financial services industries continue to thrive in this new era.
Good to see that you acknowledge that the CDs are unlikely to still be harbouring undeclared money. We’re making progress. The penny is dropping.
Colin
You really are wasting your time
I know this story inside out…
And all the pressure that did have to be brought to bear
Politely, you’re dissembling
[…] I noted that 3 million people in the UK own at least 5.7 million offshore bank accounts according to […]
Gosh! i`ve always felt bad about not being one of the 1% – now I learn I`m not even one of the 10%
A poster above just hit the nail on the head, what interest rates? Besides every account in Jersey requires proof of tax status for the Bank and is reported accordingly.
Funny how Jersey was supposed to have gone bust 4 years ago according to Richard, yet is adding to its reserves in every annual Budget!
Wait until the market crashes
You are banking on unrealised reserves
If you knew anything about finance you would know how dangerous that is
When’s the market going to crash Richard?
Most seasoned economists think soon
Have you noticed how muted forecasts are?
And when the world realises oil has to stay in the ground – then see what happens
“So very politely, I am happy for all who are innocent to prove the fact.”
I, personally, would be happier with the burden of proof being on the accuser, rather than the accused.
It is, overall
But they require evidence
CSR provides it
Let CRS carry on doing its job. It’s a good tool – it actually works.
Which is why JerseyCDs fought automatic information exchange for so long, no doubt
And please don’t say they did not
I campaigned right through the European Union Savings Tax Directive era
Richard
That’s rather disingenuous on your part. The CDs only fought automatic exchange in order to maintain a level playing field alongside with Luxembourg, Switzerland and other competing jurisdictions, who had chosen the withholding tax alternative which the EU was offering. There is nothing at all wrong in choosing one of two options freely on offer, especially when opting for the other option would have put the CDs at a massive competitive disadvantage of retaining existing business.
So untrue …. that was just thieves banding together
Richard
I know people who sat in the very same room as you at meetings regarding the EU Savings Directive. It is fair to say that your recollection of events is very different from theirs.
Let’s consider what CRS has achieved so far. High quality offshore business with nothing to hide has seen a flight to quality from low-calibre jurisdictions to the Channel Islands. As I said, it has been very beneficial to the islands. There are more people employed in the industry in the islands today than there were before the 2008 crash. That’s the reality. Not want you want to hear, but that’s how it is.
It wasn’t what happened in the rooms that mattered
Behind the scenes is what matters
And documented history, which was of continual resistance
You are now wasting my time
Expect the consequences
Reading these responses it is clear to me that those who were benefiting from any under reporting did not voluntarily disclose or seek to ensure that these accounts were considered by the UK tax authorities.
There is evidence of external pressure being brought to bear – pressure that Richard was told by an arm of Government was a waste of time (and he is allowed to mention that surely?).
Acts speak louder than words fellas. There was nothing voluntary about this.
You’re behaving as if nothing has happened to undermine the achievement in turning around negative attitudes to taxation in a society where evasion is rife.
But it has.
And your pride seems a little dented.
Why?
Yet still, you deny to accept the truth of the situation.
You’re bad losers, I say.
It is not really very surprising that many of the people from other countries who are living and working in the UK – and many people who are resident in the UK but spend lengthy periods outside the UK – have reportable “financial accounts” in other countries. Not just bank accounts, by the way, but financial investments too.
What is more interesting to my eye is that HMRC says they have raised £2.9bn from offshore compliance work since 2010, and secured and protected £200bn. That appears to be saying non-compliance is about 1.5%, or to put it another way compliance is about 98.5%.
You are misinterpreting the stats
The direct saving is £2.9bn
They claim legislation and others moves has prevented the loss of a further £200bn
They are not saying the tax base is £200bn
The implication is a high potential rate of non-compliance