HM Revenue and Customs’ response to the International Consortium of Investigative Journalists (ICIJ) story on offshore tax evasion
HMRC media statement (published 3.4.16)
Jennie Granger, Director General of Enforcement and Compliance, HM Revenue and Customs, said:
"HMRC is committed to exposing and acting on financial wrongdoing and we relentlessly pursue tax evaders to ensure that they pay every penny of taxes and fines they owe.
"HMRC can confirm that we have already received a great deal of information on offshore companies, including in Panama, from a wide range of sources, which is currently the subject of intensive investigation. We have asked the ICIJ to share the leaked data that they have obtained with us. We will closely examine this data and will act on it swiftly and appropriately.
"We have brought in more than £2 billion from offshore tax evaders since 2010 and the Government has repeatedly strengthened our powers and resources with new criminal offences and higher penalties, so we can take even tougher action against the minority who try to cheat the honest majority by hiding their money in offshore tax havens.
"Our message is clear: there are no safe havens for tax evaders and no-one should be in any doubt that the days of hiding money offshore are gone. The dishonest minority, who can most afford it, must pay their legal share of tax, like the honest majority already does."
Additional information on offshore tax evasion
HMRC has a great deal of information on offshore companies, gathered from a wide range of sources and intelligence, and is following up thousands of leads on potential offshore evasion at any one time. We have brought in more than £2 billion from offshore tax evaders since 2010.
We have asked the International Consortium of Investigative Journalists, the BBC and The Guardian to share their data with us, so we can cross-reference it with ‘Connect’, our own world-leading database of intelligence, to see if it adds to the 700 current leads we already have with a link to Panama. We will closely examine this data and will act on it swiftly and appropriately, where we suspect that UK tax has been evaded.
The data we receive and the leads we are pursuing will not necessarily prove wrongdoing and result in fines or convictions. Such data is often incomplete or years out-of-date or does not contain the information required to identify individuals. But it can help build up a bigger picture which allows us to join the dots and catch tax evaders.
HMRC is committed to exposing and acting on financial wrongdoing and we relentlessly pursue tax evaders to ensure that they pay every penny of taxes and fines they owe.
The specialist offshore unit in our Fraud Investigation Service is currently investigating more than 1,100 cases of offshore evasion around the world, with more than 90 individuals subject to current criminal investigation.
The Government has repeatedly strengthened our powers and resources with new criminal offences and higher penalties, so we can take even tougher action against the tiny minority who try to cheat the honest majority by hiding their money in offshore tax havens.
Our message is clear: there are no safe havens for tax evaders and no-one should be in any doubt that the days of hiding money offshore are gone. The dishonest minority, who can most afford it, must pay their legal share of tax, like the honest majority already does.
New powers and action against offshore tax evasion
The Government has led a transformation in global financial transparency which, from this year, will see HMRC automatically receive offshore account and trust data from more than 90 countries, including British Overseas Territories and Crown Dependencies with a financial centre. This will further increase HMRC’s ability to crack down on the tiny minority of tax cheats still hiding their money offshore.
The Government has introduced tough new powers and game-changing measures to tackle offshore and onshore tax evasion, and as recently as the summer Budget 2015 gave HMRC an additional £800 million to invest in compliance and tax evasion work.
This is expected to recover £7.2 billion in tax over the next five years and includes tripling the number of criminal investigations that HMRC can undertake into serious and complex tax crime, focusing particularly on wealthy individuals and corporates, with the aim of achieving 100 prosecutions a year by the end of the Parliament.
The new measures include:
- higher financial penalties for those hiding assets offshore, such as, for the first time, taking part of the evaded asset as a penalty. These are in addition to existing measures, which already allow for fines of up to 300% of any tax found to have been hidden offshore
- new civil penalties on those who enable tax evasion, so they will face a penalty as well as the tax evader
- public naming both of tax evaders and those who enable tax evasion
- a new criminal offence for corporations that fail to prevent the facilitation of tax evasion. The new power, which is being legislated for shortly, will ensure that corporations exercise due diligence over the service they provide, and ensure that HMRC can prosecute those who don’t
- a new strict liability criminal offence for offshore evasion, which we are currently legislating for – so in the worst cases it is no longer possible to plead ignorance in an attempt to avoid criminal prosecution.
We have also ended permanent non-dom status from April 2017, and ensured that inheritance tax will be levied on all UK residential property, regardless of its holding structure.
Data on tax evasion
Data from third parties is an important part of our intelligence. Last year, HMRC received 86,000 separate leads, ranging from local concerns to intelligence that helps us take down criminal gangs. We also gathered around 100 million items of data through a combination of intelligence gathering, bulk data and our own expert investigations.
All of this information is linked and cross referenced to other data, using some of the most sophisticated computer systems in the world, to build up a picture that can lead to tough action against those who seek to cheat their taxes. Where we find an allegation or dataset that clearly demonstrates or corroborates non-compliance, we won’t hesitate to act.
HMRC welcomes information from members of the public who suspect or have evidence of tax evasion, and in some instances they may be eligible for a financial reward. The Tax Evasion Hotline number is 0800 788 887.
HMRC’s successes in tackling tax evasion
In 2014-15 alone, HMRC collected and secured £26.6 billion from compliance activities, including from tax evasion, avoidance, fraud and organised crime – a 43% increase from £18.6 billion in 2011-12.
- brought in more than £2 billion from offshore disclosures and other offshore tax evasion initiatives since 2010
- protected more than £6 billion through criminal investigations since 2010, with 2,647 convictions and prison sentences totalling 3,125 years
- launched more than 140 taskforces in high-risk sectors, including illegal alcohol and tobacco sales, recovering more than £0.5 billion in additional revenue since 2011
- collected more than £1.5 billion in additional tax revenue from the UK’s wealthiest people through our High Net Worth Unit since its creation in 2009
- secured more than £38 billion as a result of our compliance work with large businesses during the last Parliament
- overseen a reduction in the UK tax gap (the gap between tax owed and tax paid) to 6.4% – its lowest-ever level and one of the lowest in the world.
Source: Gov.uk (Contains public sector information licensed under the Open Government Licence v3.0.)