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.
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