HMRC withheld offshore tax avoidance figures for UK’s wealthy during election

8 comments

1. I look forward to Starmer using his absolute stinking majority to begin closing tax loopholes.

   When his 5 year term ends and he’s failed to even close 1. Yeah. All that needs to be said

2. This article is just terrible and seems to intentionally conflate issues to make things seem worse and more sinister than they are.

   The tax gap it discusses is the entire tax gap not specifically for wealthy individuals holding assets off shore. That was always the smallest part of the tax gap based on data from previous years (they always made up about 5% of the tax gap).

   It then conflates what labour intends to do with closing loopholes, with the data the HRMC should and has published in the past.

   Labour want’s to close “loopholes” the HMRC tax gap does not include them, when they break down the data for “non-compliance by UK residents failing to declare their offshore income” they aren’t talking about tax avoidance schemes which allow them to reduce their tax liability which Labour hopes to tap into. They are talking about outright tax evasion by not reporting income, if the tax on that income could’ve been avoided legally there would be no need to not report it.

   Edit: added a comma to the 3rd para.

3. Perhaps the sub-editor who wrote the ‘*withheld*’ headline should have actually read the article where it says “*Officials concluded that this “additional breakdown of the tax gap should not be released within the election period” in line with guidance for civil servants.*”

   To ‘*withhold*’ something is to refuse to provide or suppress something that you should be providing, and it isn’t actually following the rules on what may or may not be published by the Civil Service during an election period.

   Edit: sorry, didn’t realise The Observer sub-editor read this and couldn’t take criticism…

4. Wait til you see how the rich pay MINUS income tax by claiming R&D and “write-downs” beyond what they’d pay in taxes!

5. To compare with comments in-thread, here are sentences from the linked article:

   *In June 2022, Lucy Frazer, then financial secretary to the Treasury, pledged that HM Revenue and Customs (HMRC) would publish figures on the offshore tax gap, but the release of the figures has been repeatedly delayed.*

   *An HMRC report published on 20 June this year – four weeks after the election was called – estimated the tax gap to be £39.8bn for the 2022-23 tax year. The tax gap is the difference between the amount of tax that should be collected and what has actually been paid.*

   *A breakdown of the figures of “non-compliance by UK residents failing to declare their offshore income” was withheld by HMRC. Officials concluded that this “additional breakdown of the tax gap should not be released within the election period” in line with guidance for civil servants.*

   *The decision to withhold the estimated figures has been challenged by the investigative thinktank TaxWatch. It says that if HMRC concluded it was too controversial to publish the offshore tax gap figures, the publication of the other tax gap figures should also have been delayed.*

   *A common reporting standard approved by the OECD in 2014 now enables the automatic exchange of financial information between partner countries to combat tax evasion.*

   *The standard under which nearly all UK residents with overseas bank accounts have the balance and interest reported annually to HMRC has provided an invaluable resource of new information to officials.*

   *Labour said that it intended to raise more than £5.2bn by 2028-29 by reducing tax avoidance and closing loopholes that allowed some people with non-domicile tax status to avoid paying tax in the UK.*

6. One of the podcasts i normally watch is Patrick Boyle, who made a rather worrying assertion about high net worth individuals leaving the UK in extremely high numbers.

   The UK was once the preferred location for many of the wealthy, with stable government, great houses (if you could afford them), private schools, prestigious universities, culture, shopping etc.

   Now they are leaving in droves.
   https://youtu.be/z6DSENMFVmg?si=aWUimXm7SL-3lUTg

7. The boss of HM Revenue and Customs has defended paying debt collectors to chase taxpayers for as little as £89 over close to five years…

8. Everybody comments, but nobody understands.

   We have international tax agreements that if you pay your tax and in another country there is no tax to pay in the UK, meaning you don’t pay tax twice. This helps investment, in the country and allows money into the country without penalty.

   Imagine if you go on a working holiday to France and pay tax on your wages there. When you came back the UK government charged you tax again. Under the agreements, this won’t happen, you will only pay tax once.

   Now register a company in Ireland and it won’t pay tax for any trade it did in the UK, but rather to Ireland where the tax rate is lower. This is what companies do and the only way to stop this and get more people and companies paying UK tax is too lower taxes.

   It costs money for companies and millionaires to do these schemes, however it is cheaper to do them than pay 40% tax. Do a flat rate of tax at 20% for all, then suddenly the avoidance scheme costs more than the tax, so the millionaires are better off paying the tax.

   Governments promise every year to cut down on tax avoidance and do nothing, it’s basically a standard political lie.