Assault on tax evaders continues

The emergence last week of the special commissioners’ decision on the
Barclays disclosure case – worth an estimated £1.5bn to the taxman – is a new
landmark in the life of the Offshore Fraud Project group reported to be behind
such initiatives.

Earlier this year the taxman got another order against a bank, which it said
would allow it to reclaim some £347m in tax. That related to information the
government had gathered from credit cards related to offshore accounts.

The latest order is broader, relating to information gathered from debit
cards and, bizarrely, from tax credit payments made to offshore accounts.

The latter point was one bone of contention in the proceedings. Barclays
argued that anyone receiving tax credit payments was unlikely to have enough
cash to be storing it tax free offshore. The government, ironically, argued that
you could be quite well off and still be getting the payments.

The Offshore Fraud group was reported to have set a target of £300m for its
first year of operation and has now blown that out of the water. Though it may
not get the money in especially quickly (how long does it take to comb through
hundreds of thousands of accounts?) one would expect that its projected yields
from the three separate disclosure orders it has so far won this year, worth
almost £2bn, would exceed that number.

The scale of the issue is quite mind-boggling, and raises another interesting
question. Given there are more accounts involved in this one order from one bank
than fill in the overseas income sections of the tax return, can we ask: are we
a nation of tax evaders?

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