Tax net tightens with latest disclosure deals

Tax net tightens with latest disclosure deals

Advisers are concerned whether HMRC is equipped to make best use of the latest automatic information-sharing deals with British overseas territories

YET MORE AUTOMATIC INFORMATION-SHARING DEALS with British Crown dependencies will be hailed as a major step forward in the government’s ongoing crusade against tax evasion and avoidance.

It’s easy to see why. If knowledge is power, then meticulous information on thousands of tax miscreants from six more countries will increase HM Revenue & Customs’ clout.

The Cayman Islands, Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands have all agreed treaties and will pilot the automatic exchange of information bilaterally with the UK and multilaterally with the G5 – the UK, France, Germany, Italy and Spain – over the next six months.

But at a time when the department is undergoing significant change, advisers are asking whether HMRC can effectively receive and act on the information provided to it.

HMRC is still in the early stages of running real-time PAYE, moving its website across to the a new domain and expanding its call centre services to compensate for the closure of its contact centres. So while the collective population of the countries is only around 211,000 – about the size of Hull – incorporating the forensic details from disparate tax systems immediately will prove no walk in the park.

Deals of this kind have been struck on a fairly regular basis over the past year or so, with Jersey, Guernsey, the Isle of Man and the G5 nations all entering into such agreements. Then there are the Swiss and Liechtensteiner facilities. They are, in of themselves, nothing new, and so HMRC must by now be used to dealing with such developments.

But practitioners rightly point out the taxman is under constant pressure to generate more revenue, despite being under-resourced both in terms of man-power and budget.

It’s not a situation precisely conducive to maximising the tax take, and so many are suggesting the department takes a step back and spreads these projects out over a longer period of time, instead of attempting to introduce them all at once.

Admittedly, problems so far have only been minor, as we saw with a minor glitch in the first days of RTI, but slowing down will mitigate any chance of an information pile-up.

However, it may not end here, with the Treasury lining up deals with France, Germany, Italy and Spain as well as the UK by the Caribbean financial centres. While it’s not quite a truly global initiative, the pool of knowledge available to the taxman is growing, and once assimilated, could prove a potent force against avoidance and evasion.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

Professional Services Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine

Accounting Firms Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021

Making Tax Digital Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource