HMRC withheld tax avoidance figures involving wealthy Britons during an election period due to concerns of offshore tax evasion schemes.

Unfortunately for them though, most don’t make it past ‘just kidding’ status! When they do eventually emerge it usually means trouble for both parties involved – an unlikely combination, certainly! So let’s hope we see some action soon to keep those pesky rats at bay until the inevitable next one shows their face again… Tax officials are coming under increased pressure this weekend to release estimated figures on offshore tax avoidance by some of Britain’s wealthiest individuals who avoided reporting it during election campaign reports. Lucy Frazer pledged for HMRC (HM Revenue and Customs) to publish figures regarding offshore tax gaps by June 2022; yet their release has repeatedly been postponed. HMRC released a report on 20 June 2019, four weeks after calling an election, that estimated that there is an annual tax gap in excess of PS39billion for 2022-23 tax year. HMRC withheld figures regarding non-compliance by UK residents failing to declare offshore income as “tax gap.” Officials concluded that any additional breakdown of the tax gap should not be released during election periods in line with guidance for civil servants. Under that guidance, statistical activities are encouraged so as to “avoid competition with candidates for attention from voters”. TaxWatch challenged this decision not to release estimated figures during an election campaign period. TaxWatch maintains that if HMRC determined publishing offshore tax gap figures would have been too controversial, other gap figures should also have been withheld from publication. Claire Aston, Director of TaxWatch noted: “Since political parties pledged in their election manifestos to close tax gaps more effectively by raising more revenue through these methods, these numbers shouldn’t have been withheld from public scrutiny. HMRC is under growing pressure to assess the size of its tax gap after figures released to Tax Policy Associates by HMRC revealed in September 2021 showed UK taxpayers held nearly PS570bn of assets abroad that could potentially fall within its scope. Officials at that time stated they hadn’t produced estimates on how many foreign accounts hadn’t been properly reported to authorities, however a common reporting standard approved by OECD in 2014 now allows partner countries to automatically exchange financial data against tax evasion. HMRC officials have found HMRC’s requirement that nearly all UK residents with overseas bank accounts report annually their balance and interest to them as an invaluable source of new data. Steve Porter, head of tax disputes and investigations at Pinsent Masons law firm said it wasn’t likely there would be much “gold in offshore tax avoidance”, with tougher penalties introduced and voluntary disclosure facilities becoming widely known about. Porter asserted: “While some individuals may steadfastly refuse to engage with HMRC and implement certain legacy tax avoidance schemes, most should already have been identified by them.” He estimated the estimated gross tax gap among individuals filing self-assessment tax returns was approximately PS2bn; with offshore tax gaps likely being proportionately small – although potentially large. He went on to elaborate that individuals filing tax returns through self-assessment had an estimated total gross tax gap estimated to be PS2 billion with an offshore gap likely comprising some percentage or other of this sum, likely amounting to less than 10% and being relatively minor compared with its total size and relative low-to-moderate percentage differences. Privacy Notice: Newsletters may contain information related to charities or external sources that is funded or produced – please check each newsletter’s content prior to subscribing or subscribing in order to subscribe without missing updates! For additional details please view our Privacy Policy. Google ReCaptcha helps protect our website, with their Privacy Policies and Terms of Service in force. Labour has pledged to raise over PS5.2bn by 2028-29 by closing loopholes enabling some non-domicile tax residents to avoid paying their due share of UK tax liabilities; The Chartered Institute of Taxation estimates the 4.8% theoretical gap could possibly be narrowed but further marginal gains might not be easy to attain. HMRC reports that revenue lost due to tax avoidance was PS1.8bn between 2022-23 – or 0.2% of total theoretical liability – according to HMRC estimates. A briefing last month noted: “Ambitious targets should be celebrated but our advice to politicians of all parties would be not spending the money before collecting it first. An HMRC spokesperson revealed: “HMRC has an impressive track record when it comes to offshore noncompliance: since launching our No Safe Havens strategy in 2019 we have secured nearly PS700m from offshore initiatives alone