UK admits it doesn’t know how much tax evasion has been made through offshore assets

The UK tax authority has admitted it has no idea how much tax evasion is being made by UK residents holding funds overseas, after new figures showed hundreds of billions of pounds were being held in tax havens.

HM Revenue & Customs revealed in a Freedom of Information request that UK residents have £850bn in financial accounts overseas, of which £570bn is in Tax Safe Haven – 2019, the latest statistics released by HMRC.

The data comes from financial data shared by more than 100 countries with HMRC since 2017, known under international rules as Common Reporting Standard (CRS).

But when asked whether HMRC used CRS data to estimate how many UK residents had correctly reported their overseas accounts, HMRC said no.

“We have not provided or received any estimates, analyses or statistics on how many foreign financial accounts are ‘appropriately disclosed’ and cannot be accurately inferred from the data we hold,” HMRC said in its response. Disclosure request.

Some account information shared under the CRS is not taxable in the UK, the response to the FOI request added.

But tax experts have criticised HMRC’s stance, warning it is sending the wrong message to those seeking tax evasion.

Dan Neidle, founder of Tax Policy Associates, a think tank that made the FOI request, said it was “surprising” that HMRC could not estimate how much of the £570bn was undeclared.

He argues that “in most cases it should be easy for HMRC to automatically cross-check tax returns” – which requires individuals to declare their offshore accounts – along with CRS data to identify tax evasion and use the results to create Approximate tax evasion.

“It’s good data, but what’s the point of not using the information?” said Arun Advani, assistant professor of economics at the University of Warwick. “It highlights the resource constraints faced by HMRC.”

Given that offshore holdings of £870bn represent around 6% of the UK’s £1.46bn total household net wealth, HMRC should do more to check it, Advani said.

Alex Cobham, chief executive of the Tax Justice Network, a pressure group that campaigned for the CRS for years before its introduction, has criticised HMRC for being “completely derelict”.

HMRC rejected claims it did not use or examine the data, saying it used CRS data to “systematically compare” it with UK tax records and information before deciding what compliance response it should take.

Compliance ranges from sending nudge letters Tell people to check their taxes for criminal investigation.

“The CRS has provided us with more critical information for our compliance activities and has played an important role in helping us tackle tax evasion,” HMRC said.

It added that since 2017/18, the ATO has brought in £570m in tax due to automatic exchange agreements, including CRS.

When asked why it didn’t make any estimates of the potential tax evasion of people who did not properly declare offshore accounts, HMRC said its data was limited.

“CRS data contains millions of records and is just one of many datasets we have access to. Not all jurisdictions in the world have signed up to CRS, and we cannot be sure that every account is properly disclosed. We do not will publish numbers that we can’t be sure of [it] is accurate. “

HMRC adds that some UK resident accounts may be owned by: no residence In the country, therefore no UK tax is payable. But it could not give a percentage of how many of the 1.2 million accounts in tax havens in 2019 were owned by non-residents.

Tim Stovold, a partner at accounting firm Moore Kingston Smith, said he suspected most accounts in tax havens were held by non-residents, adding that the British regime “actively encourages people to put money overseas”.

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