The FT has reported that HMRC plans to include new offshore tax gap statistics in 2023, in its Measuring Tax Gaps 2023 publication. The new figures are expected to estimate the amount of tax evaded or avoided by UK residents who have offshore assets. This follows the disclosure earlier in 2022 that, although HMRC had received data under the Common Reporting Standard suggesting that UK residents held £850bn in overseas accounts, it had not produced an estimate of the proportion of overseas accounts that had been properly disclosed.
In May this year, Tax Policy Associates revealed that UK taxpayers hold some £570bn in tax haven accounts, but that HMRC has made no attempt to estimate how much of that amount has gone undeclared in UK tax returns.
HMRC has said that it had planned to publish the offshore tax gap in Measuring Tax gaps 2022, but that those plans had had to be pushed back following pandemic delays.
In order to produce meaningful figures in its proposed 2023 report, HMRC will need to match the CRS data with individual taxpayer data, identifying mismatches between the data shared by the offshore tax authorities and the disclosures made by individuals. As the government looks to plug gaps in the UK’s finances, this could be a helpful source of extra tax revenue. HMRC will also be aiming to demonstrate progress in closing the offshore tax gap in future years.
Commenting on the potential bonanza for HMRC, Andrew Park, tax investigations partner at Andersen, suggests that the ‘low hanging fruit’ has already gone, with ‘blatantly undisclosed investment accounts’ already having been dealt with following the introduction of the automatic exchange of financial account information. Park also notes that remaining avoidance comes down to ‘technical interpretation or advertent errors’, while HMRC is hard pressed to deal with the enormous amount of data with ‘no more people’ and ‘other pressing priorities – including chasing down Covid-19 support fraud’.
The FT has reported that HMRC plans to include new offshore tax gap statistics in 2023, in its Measuring Tax Gaps 2023 publication. The new figures are expected to estimate the amount of tax evaded or avoided by UK residents who have offshore assets. This follows the disclosure earlier in 2022 that, although HMRC had received data under the Common Reporting Standard suggesting that UK residents held £850bn in overseas accounts, it had not produced an estimate of the proportion of overseas accounts that had been properly disclosed.
In May this year, Tax Policy Associates revealed that UK taxpayers hold some £570bn in tax haven accounts, but that HMRC has made no attempt to estimate how much of that amount has gone undeclared in UK tax returns.
HMRC has said that it had planned to publish the offshore tax gap in Measuring Tax gaps 2022, but that those plans had had to be pushed back following pandemic delays.
In order to produce meaningful figures in its proposed 2023 report, HMRC will need to match the CRS data with individual taxpayer data, identifying mismatches between the data shared by the offshore tax authorities and the disclosures made by individuals. As the government looks to plug gaps in the UK’s finances, this could be a helpful source of extra tax revenue. HMRC will also be aiming to demonstrate progress in closing the offshore tax gap in future years.
Commenting on the potential bonanza for HMRC, Andrew Park, tax investigations partner at Andersen, suggests that the ‘low hanging fruit’ has already gone, with ‘blatantly undisclosed investment accounts’ already having been dealt with following the introduction of the automatic exchange of financial account information. Park also notes that remaining avoidance comes down to ‘technical interpretation or advertent errors’, while HMRC is hard pressed to deal with the enormous amount of data with ‘no more people’ and ‘other pressing priorities – including chasing down Covid-19 support fraud’.
