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October 28, 2013 8:16 pm
MPs have attacked the tax authority for raising just a quarter of the money expected from an offshore tax evasion agreement struck with Switzerland.
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Margaret Hodge, chair of the Public Accounts Committee, on Monday criticised the original estimate that the government would raise £3.1bn from secret Swiss accounts as “completely unrealistic”.
Ed Troup, HMRC’s tax assurance commissioner, said the forecast had been an extrapolation from known accounts but its inaccuracy reflected the constraints of Swiss bank secrecy. “Building a picture of what is in Switzerland is extremely difficult,” he said.
He provided no explanation of why the revenues raised had fallen short of expectations but said he had “conveyed our concern about the amounts we were receiving” to the Swiss authorities.
HMRC said it had already been given names of 18,000 Swiss account holders under the terms of the deal with Switzerland, which required banks to divulge the names of clients who did not opt to pay a withholding tax to the UK. It has started sending letters to the named individuals and said 600 people had already come forward to settle their liabilities.
Mr Troup said £440m had been paid by Switzerland in the current financial year, following a payment of £342m in January. He defended the agreement saying that, given Swiss banking secrecy, “it is money we could not have got from any other means”.
The MPs criticised HMRC for settling cases of offshore evasion rather than mounting more criminal prosecutions. Ms Hodge said that HM Revenue & Customs’ record in securing criminal prosecutions of offshore tax evasion cases was “laughable”. Mr Troup responded by saying criminal prosecutions were not a way to maximise tax revenues.
Shabana Mahmood MP, shadow Treasury minister, said the shortfall from the Swiss deal would be a further blow to a deficit reduction plan. “We warned two years ago that this deal had more holes than Swiss cheese. And now we learn that half way through the year the government has raised just a fraction of the £3.1bn George Osborne promised.”
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