25/01/23

Boots On The Ground: Why The UK Taxman Is Unable To Estimate The Offshore Tax Gap

Much to everyone’s surprise, the UK’s HM Revenue & Customs (HMRC) was forced to admit in May 2022 in response to a freedom of information request that it had no current estimate of the scale of the taxes underpaid by UK residents relating to their offshore interests. In the advent of nearly a decade and a half of mass data thefts and leaks from offshore service providers and the institution of mass automatic financial data sharing initiatives such as the Common Reporting Standard (CRS), this seemed utterly inexplicable. Even more bizarrely, HMRC then released a publication on 23 June 2022 estimating the overall “tax gap” with astonishing claimed accuracy at 5.1 per cent of the total potential tax yield notwithstanding its admitted cluelessness about the remaining scale of the offshore component.

Share this article