Over many years, I argued for automatic information exchange of data from tax havens to authorities like HM Revenue & Customs. This means that the UK tax authority is automatically notified by tax havens of the identities of those persons who are UK tax residents who hold accounts in such places. In June 2009, I was told by the UK Treasury that this would not happen in my lifetime. It began in 2017.
I now note from the FT that:
HM Revenue & Customs sent nearly a third more “nudge” letters to holders of overseas assets in the tax year to April compared with the previous year, as it revived a drive to crack down on tax avoidance. After reducing its investigative activities during the Covid pandemic, the tax office sent 23,936 such letters relating to offshore matters in 2022-23, up 31 per cent on the 18,260 issued in 2021-22, a freedom of information request has revealed.
Where did the information to create those nudge letters come from? From automatic information exchange, of course.
I am aware that many suggest that what I write here is ignored. It often feels that way at first. But, eventually, change happens, as the recipients of those 23,936 letters know. Many of them will have had sleepless nights as a result. I can sleep easy with that: my conscience is clear. I did the right thing.
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As an insider at the time working with Jimmy Hill I can confirm that that really happened.
That in the summer of 2009, the UK Treasury (Chancellor A. M. Darling) told you that automatic information exchange with tax havens for mutual tax residents wouldn’t be happening in our lifetime.
I don’t recall you being in the room.
Darling was not. Treasury officials were.
At the time Jimmy Reckon wasn’t anywhere. There’s a clue in the name.
I know…
Can’t tax havens, or undeclared tax havens, just be made illegal, or is there a genuine use?
The UK is a tax haven. So is Ireland, the Netherlands and parts of the US. Germany too. How do we declare them illegal?
“The UK is a tax haven. So is Ireland, the Netherlands and parts of the US. Germany too. How do we declare them illegal?”
It could only happen if those countries that are not tax havens, organise amongst themselves to isolate those that are. So the EU has first to sort out their own members, e.g. Ireland and The Netherlands.
Then overtly discriminate in trade and capital flows against countries that are tax havens, or enable tax havens within their own country, or on their overseas territories, such as the UK, USA.
It seems unimaginable now, but I think need and aim that is realised by some strategic thinkers in the EU, and by many of those who would resist such moves by any means possible, in the UK, USA, and other countries.
The reality so that every country can technically be a tax haven to some degree.
In terms of tax priorities this is now relatively low.
I suggest that depending on what you want many jurisdictions offer different advantages if that makes sense, a bit like registering ships