BusinessCorporate FinanceDoubts emerge over HMRC’s £1.5bn Barclays tax haul

Doubts emerge over HMRC’s £1.5bn Barclays tax haul

Barclays tax haul in spotlight after disclosure orders on additional banks look set to reap smaller returns for Treasury

The taxman’s ability to recoup £1.5bn from Barclays customers in unpaid taxes
has been put in doubt after HM Revenue &
Customs
revealed it was anticipating a much smaller haul from the four other
banks it has subsequently won disclosure orders against.

HMRC estimated that the four offshore
customer account disclosure orders it was awarded by the special commissioners
last week could bring in only £275m, due to a new method of calculation.

The orders were won against four of the UK’s largest banks: Lloyds TSB, HSBC,
HBOS and RBS.

The taxman said that its £275m estimate was generated by a ‘revised
methodology’ that was more cautious than the one used in the landmark Barclays
case it won last year.

A HMRC spokesman said that the Barclays figure had been calculated at the
time as part of a rela-tively new methodology, while the figure for the latest
disclosure orders had benefited from experience and evidence.

But HMRC said it believed it could still recover the £1.5bn.

‘We are not necessarily revising that figure,’ said the spokesman.

Grant Thornton tax partner Mike Warburton suggested that the Barclays
estimate may have been deliberately inflated to help persuade the special
commissioners to rule in HMRC’s favour.

There is also the possibility that a lower estimated haul for the other banks
could make it easier to issue an ‘amnesty’.

Warburton questioned whether there was government appetite outside of the
Treasury for an amnesty: ‘I think part of the problem is a battle between
Treasury and others in government over any type of amnesty, so perhaps the
numbers have been played down to make one more possible.’

Anne Redston, the CIoT’s personal tax specialist, said the biggest issue for
HMRC was not whether it would rake back £1.5bn from Barclays, but how to trawl
through the data for the hundreds of thousands of bank customers it now has in
its possession. ‘I’m sure they’ll look to streamline the process, but HMRC has
insisted there will not be an amnesty,’ Redston said.

With staff cuts beckoning, Redston said it was unlikely that HMRC would have
armies of workers available to trawl through individuals’ details. ‘It would be
helpful for HMRC to say something soon about its plans,’ she said.

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