04/04/18

UK Treasury Select Committee announces new offshore tax inquiry

(Cayman Compass) -- The House of Commons Treasury Select Committee has announced several tax inquiries to assess the progress made by Her Majesty’s Revenue and Customs in tackling offshore tax evasion and in discouraging the use of tax avoidance schemes.

An inquiry by the Treasury Sub-Committee intends to examine the success of U.K. tax authorities in reducing the amount of “tax lost to avoidance and offshore evasion” and assess the resources available to HMRC to effect real change in the behavior of “tax dodgers” and their service providers.

Coinciding with the announcement, Treasury Sub-Committee Chair John Mann published an opinion piece in U.K. newspaper The Guardian in which he states that “tax havens are a stain on Britain.”

In the article the Labour MP said, “We need answers about crown dependencies and overseas territories that help the wealthy dodge tax owed to society.”

He pointed to the role of the British Virgin Islands in the Panama Papers as home to half of the 240,000 shell companies set up by Panamanian law firm Mossack Fonseca and the U.K. tax gap of £34 billion between the amount of tax owed and the amount of tax collected.

Noting that Crown dependencies and overseas territories are included on a tax graylist by the European Union, Mr. Mann said: “We should regard it as a matter of national shame that the Crown Dependencies and Overseas Territories that fly our flag give shelter to the wealth of the world’s financial elite. But we should be angry.”

He claimed, “the clean-up starts now” and announced he would put pressure on ministers to account for the holes in the tax system.

“They also need to explain how the relationship with crown dependencies and overseas territories works, and how they can clamp down.”

In addition, Mr. Mann said, “I want to hear from the dependencies and territories themselves.”