Hartnett targets Swiss accounts in fight against tax evasion

Dave Hartnett was once described as the taxman’s gamekeeper, but he may be
viewed more as a poacher by tax havens trying to keep account holders’ details
out of his range.

HMRC’s groundbreaking deal with Liechtenstein was seen as a major step
forward in the fight against tax evasion, and the taxman’s permanent secretary
wants the Alpine idyll of Switzerland to follow suit.

The taxman is also finally set to bare his teeth on those who have failed to
come forward in tax amnesties by hauling them through the courts.

“Nations are now working together to deal with this issue,” said Hartnett.
“What [HMRC] would really like to do is open up Switzerland.

“The UK and many other governments are determined to crush tax evasion
through offshore accounts and I think that’s what will happen.”

Tax information talks have not always been cordial, Hartnett said. “There are
some countries who are resistant. One or two tax havens would like to be back on
an OECD blacklist so they can hoover up money from other people who still want
to hide it.”

Hartnett warned some countries still “fervently” believed in banking secrecy
and in tax secrecy. “They believe that a country like the UK should have a major
amnesty – not just a disclosure regime – where we forgive [unpaid] taxes and use
that to make disclosures, which I don’t think the UK is going to do.”

He cited a concerted international effort to achieve information exchange
before confirming prosecutions were in the pipeline. “I think I haven’t said
this for a little while, but we have got cases that will be coming forward for
prosecution where people have hidden money offshore.

“They take time to assemble, time for the lawyers to make sure the cases are
good, but there will be cases – a number from the ODF and there will be some
from the NDO.”

Hartnett told Accountancy Age the Liechtenstein success was
unexpected. “We didn’t think we would open up Liechtenstein in the way we did.
There are some very big accounts in Liechtenstein – very big. There are lots of
tens of millions in some accounts, which need sorting out.”

Talks are ongoing with a “couple of other countries” about similar
arrangements to Liechtenstein.

He will be the UK’s envoy at a gathering of tax commissioners in Washington
next week, where he said Liechtenstein-style agreements would be high on the
agenda.

After the registration window for the New Disclosure Opportunity closed at
the beginning of the month, Hartnett remained positive about the take-up,
despite some advisers panning the lack of appetite.

“We’re definitely not disappointed with 10,000 registrations. It really
doesn’t matter whether the response is big, small or indifferent because, if
people don’t disclose, we will investigate and, if we do the investigating,
there will be much bigger penalties.”

IN OUR VIEW

HMRC is bullish on the prospects for future tax collection, and it will be
held to its promises as the exchequer desperately needs to bolster the tax take
as the economy continues to creak.

Further reading:

hmrc.gov.uk