JUST ONE SUPER RICH TAX CHEAT NAILED IN SEVEN YEARS
HMRC probes 2,000 for dodging £2bn but...
A TASKFORCE set up to catch wealthy tax dodgers has claimed just one scalp in seven years.
The 380- strong unit targets the super rich who hide their money offshore or use aggressive avoidance schemes.
More than 2,000 individuals – each worth at least £ 20million – are suspected of dodging almost £2billion between them.
But only one has been successfully prosecuted – and that was back in July 2012. The HM Revenue & Customs unit is also racking up a £15million annual wage bill. MPs said today’s report from the National Audit Office showed the wealthy were often let off the hook while families and small businesses were hounded.
‘We’re wimps when it comes to taking on the rich and powerful,’ said Margaret Hodge, who is the Labour chairman of a cross-party group on responsible taxation.
‘This is yet another piece of evidence that confirms that HMRC will not use the legal powers at its disposal to pursue the richest in our country who are deliberately avoiding tax – but have an army of lawyers, accountants and bankers at their disposal.’
The Commons public accounts committee says it will launch an inquiry based on the audit office findings.
Its chairman, Labour MP Meg Hillier, said: ‘This low prosecution rate underlines concerns that high net worth individuals and their advisers are able to keep one step ahead of HMRC.
‘We will be questioning HMRC about the level of prosecutions and whether it is taking the right approach.’
The taskforce was established by
HMRC in April 2009 to focus on Britain’s 6,000 wealthiest individuals.
In its report the audit office reveals the unit is currently investigating around 2,150 people thought to owe around £1.9billion to the Treasury.
This included 40 individuals named in the notorious ‘Panama Papers’ that were leaked earlier this year.
HMRC officials have boasted of the success of the unit, and say it hauled in an extra £416million in unpaid tax in the financial year to April.
But it has been extraordinarily reluctant to launch criminal investigations, despite being given extra public funding to pursue tax dodgers through the courts.
According to today’s report, the unit’s agents have investigated and closed 72 cases over the past five years.
Seventy of these were civil cases, with individuals suspected of legal but highly aggressive tax avoidance. This is where they are judged to have bent the rules but not broken the law.
The other two cases – involving illegal tax evasion – were passed to the Crown Prosecution Service. One was taken forward and
‘The powerful slip through the net’
led to the conviction of Michael Shanly. The property developer pleaded guilty to tax evasion worth £430,000 after hiding an inheritance from his mother in a secret Swiss bank account. Even this case was handed to HMRC on a plate by French authorities.
Mr Shanly was on a list of 6,000 UK citizens who hid money in HSBC bank accounts in Geneva. The list was stolen by an employee of the bank and passed to HMRC in 2010.
Campaigners accuse the agency of pursuing ordinary taxpayers, who cannot afford lawyers and accountants, far more aggressively than the rich. Hundreds have been taken to court for small sums in an HMRC crackdown on plumbers, families who employ nannies and even strippers.
A separate report by the audit office in December found that £16billion was lost to tax fraud every year.
It accused HMRC of pursuing less complex cases involving less than £10,000 in order to hit a target of launching 1,000 prosecutions a year.
Despite pledges to crack down on evasion from a succession of prime ministers, including Gordon Brown and David Cameron, Britain has an annual ‘tax gap’ of £36billion. That is the difference between the amount of tax owed and the amount collected by HMRC.
Labour MP Chris Leslie said: ‘It is pathetic that HMRC and the Treas- ury are continuing to let the rich and powerful slip through their fingers. The system needs tilting back in the direction of the ordinary, honest taxpayer.’
A spokesman for HMRC said: ‘HMRC man-marks the wealthy with highly sophisticated tax experts because their affairs are complex and involve large amounts of tax.
‘This is why one in three of them are currently being investigated by HMRC and why more of them are subject to such intensive scrutiny than small businesses or personal taxpayers. Last year this resulted in an additional £416million in compliance revenues from the very wealthiest.’
Supporters of HMRC say pursuing a criminal prosecution is hugely expensive – it takes an average of 44 months to take a case to court.
But critics say it is wrong to give offenders sweetheart pay-off deals instead of going through the courts.
In August, ministers said tax dodgers who hid money offshore faced swingeing fines. They are now being given two years to come clean about the scale of their offshore wealth or face penalties of up to 200 per cent of the amount owed. The previous maximum fine was 100 per cent of the money owed.
Officials said a new deal on information sharing with tax havens like the Cayman Islands and Luxembourg meant there was now a much better chance of recouping money.
Jane Ellison, financial secretary to the Treasury, said: ‘It has been too easy for people to hide their money.’ Comment