HMRC Holds Offshore Tax Loss Data but Withholds Details
An MP has called on HM Revenue & Customs (HMRC) to publish its official estimate of tax lost to offshore havens, after it emerged the authority possesses relevant data but refuses to share it.
Freedom of Information Request Results
A Freedom of Information request by TaxWatch, shared with TBIJ, revealed that despite previous statements denying it, HMRC has data needed to estimate the offshore tax gap but has not released it.
“We urgently need HMRC to clarify the situation – otherwise we will never crack down on tax dodging,” said Lloyd Hatton MP, a member of the Public Accounts Committee.
Understanding the Offshore Tax Gap
The offshore tax gap measures the difference between the tax the UK should collect from overseas holdings and what it actually receives. It reflects the public cost when money is shifted offshore to avoid or evade tax.
HMRC's Contradictory Statements
- HMRC previously claimed it did not have an estimate for the overall offshore tax gap.
- Following the FOI request, HMRC confirmed it holds a figure for "offshore tax at risk."
- This figure represents the estimated tax potentially lost through avoidance, evasion, and non-compliance.
- HMRC itself noted that this number could serve to calculate the offshore tax gap.
Implications
The refusal to disclose this data hinders transparency and delays efforts to address offshore tax avoidance.
Summary: HMRC possesses data estimating tax lost offshore but withholds it, obstructing effective action against tax avoidance and evasion.