Paul Flynn – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Paul Flynn on 2016-04-08.

To ask Mr Chancellor of the Exchequer, with reference to paragraph A.23 of the Economic and fiscal outlook of the Office for Budget Responsibility, Cm 9212, published in March 2016, what steps he has taken to increase HM Revenue and Custom’s yields from tax repatriation from British overseas territories.

Mr David Gauke

The Government is absolutely committed to exposing and acting on financial wrongdoing and we relentlessly pursue tax evaders.

HM Revenue and Customs (HMRC) has brought in more than £2 billion from offshore tax evaders since 2010 and the government has repeatedly strengthened our powers so we can take even tougher action against those who try to cheat the honest majority by hiding their money in offshore tax havens.

The Government has led a transformation in global tax transparency which, from this year, will see HMRC start to automatically receive offshore account and trust data from more than 90 countries, including British Overseas Territories and Crown Dependencies. This will further increase HMRC’s ability to crack down on those still hiding their money offshore.

The Government is further pushing for full and effective transparency for UK law enforcement to have access to beneficial ownership information of companies from all its Crown Dependencies and Overseas Territories.

The Government has also 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 powers and measures include:

  • Higher financial penalties for those hiding money and other assets offshore, such as, for the first time, linking the penalty to the value of the asset kept offshore. These are in addition to existing measures which already allow for fines of up to 300% of any tax found to have been evaded offshore.

  • New civil penalties for those who deliberately enable offshore evasion so they will face the same penalty as the tax evader.

  • Public naming of both evaders and those who enable evasion.

  • A new criminal offence for corporations that fail to prevent their representatives from facilitating tax evasion. The new offence, which will be legislated for this year, will ensure that corporations exercise due diligence over the services they provide, and ensure that those who don’t can be held to account.

  • A new strict liability criminal offence for offshore evasion, which we are currently legislating for – so in the worst cases it’s no longer possible to plead ignorance in an attempt to avoid criminal prosecution.