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Britain’s Tax Collectors – Coming to Get Us

March 3, 2014

Offshore Tax

I came across this interesting advertisement in yesterday’s Sunday Times newspaper. What appears to be a woman using an atlas as a hijab is in fact a message from Her Majesty’s Revenue and Customs, the UK government body responsible for collecting our taxes.

In the small print it reads:

New international agreements will let us see more information about your overseas accounts. If you’ve declared all your income you have nothing to worry about. But if you haven’t, and we catch you, you’ll have to pay your undeclared tax, a penalty of up to double the tax you owe and you could even go to prison. So come to us before we come to you.

Apart from the ethnic and religious overtones of the woman’s picture (assuming she is a woman), it’s a pretty unsubtle message. I wonder who will respond to it by coming out with their hands up. Can there be anyone with sufficient funds offshore to warrant the HMRC’s attention who is not aware of the rules and penalties around undeclared offshore income – apart that is from gullible comedians, footballers and actors who place their trust in sharks who devise allegedly rock solid tax avoidance schemes characterised by their cynicism and amorality? Apparently there are. HMRC claims to have raised £600 million from tax evaders in the last financial year.

But let’s face it, the really high net worth individuals whose ill-gotten gains might conceivably contribute more than an infinitesimal increase in Britain’s tax take have enough accounting and legal brainpower behind them to tie the HRMC up in knots. So presumably with this kind of meat-axe campaign, out tax collectors are aiming at the small fry – the low-hanging fruit.

If they really want to raise some serious money, they should remember the exploits of Hervé Falciani, whose alleged theft of the details of 130,000 potential tax evaders from his employer, HSBC (known to readers of this blog as my favourite bank), led to the creation of the Lagarde List. This list, a subset of Falciani’s, contains the names of 24,000 European “potential” tax evaders. was named after Christine Lagarde, then the French finance minister and now the managing Director of the International Monetary Fund. She shared nearly two thousand names from the list with the Greek government, who have failed to prosecute any of those named, presumably because they as as innocent as new-born babies.

It was a nice idea, so why does the HMRC not announce that it will pay a bounty of 20% of tax recovered to anyone who blows the whistle on tax evaders, with no questions asked as to how they came by the information? That surely would attract the attention of a whole host of people in the know about the various scams used by the seriously wealthy on a n-win-no-fee basis, most likely with a modest witness protection programme thrown in.

Either that, or the tax man should prevail on the GCHQ – our national snooping service – to spend less time looking at the naughty pictures they came across by hacking into Yahoo’s video traffic and more time going after the tax evaders.

On the other hand, perhaps they have been persuaded that the consequences of getting too tough on the UK-domiciled plutocrats might be that these guys would get out of the UK for good, precipitating a sudden glut of large houses on the property market, thereby leading to a house price collapse and a dramatic decrease in negative equity, with all the resulting negative consequences for the national economy.

If its hands are thus tied, it’s not surprising that the HMRC should choose to spend our money on nasty little ads like the one in the Sunday Times. The only trouble is that the £600 million raised from 617 prosecutions in the 2012/13 tax year represents  a mere 0.13% of the £470 billion raised  – according to the Guardian newspaper – in tax revenue during that year. Still, I suppose that’s enough to pay for a couple of extra hospitals, or maybe a school or two. Or, to put it another way, it contributes 6% of the total cost of the National Health Service patient records computer system abandoned last year.

Oh well, at least we have another slug of money to set aside for the next bank bail-out, or maybe to waste on another ill-conceived IT project. One step forwards, three steps back. Meanwhile, watch out for the mean-looking lady in the paper hijab….

From → Business, Politics, Social, UK

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