ADVISERS have raised questions over whether HM Revenue & Customs truly wields the power it claims in a prominent advert it placed in the Sunday Times.
In the advert (pictured), the tax authority lists more than 90 countries and jurisdictions that are set to commence the sharing of financial information on UK taxpayers.
However, doubts have been raised by practitioners over whether HMRC can readily handle and make use of the information garnered through the arrangements.
A senior tax partner at MHA MacIntyre Hudson, Nigel May, said: “Campaigns like this are all well and good but questions remain over the ability of HMRC to use the information they gain from this high profile action. We have found that similar previous advertising tended to flush out taxpayers who had in fact fully complied and were just terrified by the inherent underlying threat.
“And we also know of other instances of cases where there was undeclared tax due of under £100 which would undoubtedly have cost the revenue more in administration costs than the small sum they received.”
The government has actively pursued the introduction of central public registers of company ownership in British overseas territories in order to allow law enforcement agencies to trace currently-anonymous criminals behind businesses. That agenda was met with resistance in some territories.
In May 2013, David Cameron hailed a deal which saw all the UK’s overseas territories signed up to automatic information-sharing deals. Under the scheme, the UK is, along with other countries involved, automatically provided with more information about bank accounts held by their taxpayers in those jurisdictions, including names, addresses, dates of birth, account numbers, account balances and details of payments made into those accounts.
That policy has also been followed more widely, and at the G8 summit that year, the prime minister made great play of making tax transparency a central issue. But he failed to convince his G8 counterparts and no binding agreement was made.
Despite that, the government has continued to strike agreements with other nations and jurisdictions, leading to the list published in the Sunday Times, along with others.
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