Hit squads to spearhead tax haven clampdown

The taxman is expected to use powers to parachute in investigators to
question officials in tax havens, experts believe, as part of plans for a global
clampdown on offshore tax jurisdictions that is due to be announced at April’s
G20 summit.

European leaders met in Berlin last weekend to discuss a new regulatory
framework, including tougher measures on tax havens.

‘We want the whole of the world to take action,’ said Gordon Brown. ‘That
will mean action against regulatory and tax havens in parts of the world which
have escaped the regulatory attention they need.’

Details of a new agreement are yet to be made public and
HMRC and the
Treasury declined to comment.

Any clampdown on investors hiding money in tax havens or multinationals
avoiding tax through artificial business structures is expected to rely on
information sharing agreements between tax authorities.

These tax information exchange agreements (TIEAs) ­ such as one signed last
month between Guernsey and HMRC ­ allow tax authorities to request information
about taxpayers and interview people in tax havens as part of their

The taxman’s offshore reach will be extended in April under the Finance Act
2008, which will help HMRC launch investigations more quickly and request
evidence, such as bank account details.

Bill Dodwell, a tax partner at Deloitte, said TIEAs would play an important
role in combating tax evasion by rich private investors, although he said
governments need to provide evidence to justify enquiries.

The UK, US, Canada and Japan, have all signed up to the Joint International
Tax Shelters Information Committee to share information about corporate tax

Chas Roy-Chowdhury, head of taxation at ACCA in the UK, called on tax havens
to ‘police’ themselves more effectively to prevent customers using the secretive
financial centres for illegal tax evasion.

‘Tax havens need to wake up to the way the climate has changed against [them]
and against secrecy,’ said Roy-Chowdhury.

Tax havens such as Switzerland, which the US has accused of harbouring tax
evaders, could find themselves named and shamed by governments and tax

In spring, the OECD is expected to update its list of blacklisted
‘un-cooperative’ tax havens ­ currently Andorra, Liechtenstein and Monaco.

Richard Baron, head of taxation at the Institute of Directors, said: ‘I don’t
think our members would have any problem about the G20 countries co-ordinating
anti-avoidance legislation but they would have a problem if this leads to a
higher tax burden or cost of location in the UK.’

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