UK ministers have praised five of the UK’s Overseas Territories for searchable registers revealing who really owns companies there. TaxWatch set out to see how these registers are working on the ground. One of the five registers, which ministers told Parliament was “fully public” and had been launched on 30 June, does not yet exist, and there are no plans to make it directly publicly searchable. In other cases, last-minute law changes have added major legal, evidential and cost hurdles to accessing the information.
Stronger powers against ‘enablers’ – those who design and enable aggressive tax avoidance and evasion – are back on the table once again. But new figures show that existing powers are still not being used.
Even after years of attempts at reform, offshore havens still offer secrecy for those determined to hide money and evade tax. In a week when Britain’s Overseas Territories have ignored yet another deadline for functioning ‘beneficial ownership’ registers, new figures on UK tax enforcement stemming from the Pandora Papers show that leaks can’t supplant properly available information about who really owns offshore companies.
Quietly buried in HMRC spreadsheets released today is the news that the UK Tax Gap is consistently much bigger than HMRC previously said. New evidence suggests that the government may be under-estimating by several billion pounds the amount of income hidden offshore, and non-compliance amongst the largest and wealthiest taxpayers.
Shrinking the £40 billion tax gap and £38 billion of outstanding tax debts is going to be critical for making today’s Spending Review numbers add up. Can HMRC deliver this with a real-term budget cut?
From the White House to the tech sector, the UK’s Digital Services Tax has been described as a discriminatory ‘tariff’ almost entirely targeting large US internet companies. New statistics show that’s not quite true.
Why aren’t enablers of tax abuse being penalised? HMRC’s powers to sanction delinquent tax advisers have roadblocks built in, and there are still gaps in naming and shaming.
HMRC is recovering more missing tax from wealthy individuals. But beneath the headlines: the tax this group is underpaying may be larger than previously thought, and is likely growing, while penalties for their non-compliance have plummeted.
The government wants to step up the fight against enablers of tax abuse (again). New powers and better information can help. But HMRC is barely using the powers and penalties it already has.
Scrapping the UK’s Digital Services Tax is the opposite of a good strategy in the face of a US trade war, when instead it should be reformed to operate better for the British public finances
Government’s Spring Statement hopes compliance and debt collection efforts pay off to recover more tax lost to avoidance
TaxWatch launches new report illustrating the damage that a lack of regulatory oversight causes taxpayers seeking help to comply with their obligations & advocating for urgent widespread reform.