HMRC tax evasion assistance requests double in five years

HMRC tax evasion assistance requests double in five years

In 2012, HMRC made 591 requests to foreign governments. In 2016, this number stood at 1096, a 7% increase on 1025 requests made in 2015

Requests made from HMRC to foreign governments for assistance with suspected tax evasion cases have almost doubled in the past five years, according to research from law firm Pinsent Masons.

In 2012, HMRC made 591 requests to foreign governments. In 2016, this number stood at 1096, a 7% increase on 1025 requests made in 2015. Pinsent Masons said one key reason behind the increase was mounting public pressure on HMRC to target individuals suspected of committing offshore tax evasion following high-profile cases, such as the Panama Papers scandal.

The requests have been made under bilateral agreements, such as double taxation agreements and tax information exchange agreements, which enable the cross-border exchange of taxpayer information between tax authorities worldwide. This information transparency has been supported by a number of OECD initiatives, including a new multilateral instrument that was adopted in 2016 and has since been signed by more than 60 jurisdictions.

Paul Noble, head of tax investigations at Pinsent Masons, said: “Enlisting the assistance of foreign tax authorities in tax investigations is a powerful weapon in HMRC’s arsenal – one that they are not hesitating to use in their pursuit of suspected tax evaders.

“Since the Panama Papers leak two years ago, the issue has been pushed to the forefront of HMRC’s agenda – this is reflected in the internationally agreed legislation to increase sharing of information.

“A sizeable number of UK-based high net worths and businesses will have complex tax affairs across multiple jurisdictions. As the amount of information available to HMRC increases, they are likely to come under more scrutiny.

“Now is certainly the time for those with tax irregularities involving overseas income and assets to correct any historical non-compliance as draconian penalties of between 100% and 200% of any unreported tax will bite after 30 September 2018.”

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

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

2y

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

2y

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

2y

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

2y

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