- 50 International & 50 Great Britain
WALLS OF GLASS
Updated: Mar 17, 2021
26 November 2020
Dear Richard and Montserrat,
In the England of the 1780s smuggling was a significant rural industry with many secret routes between the south coast and their customers in the centre of the country. Stories abound with one being local’s hiding barrels of French brandy in a village pond. Retrieving them at night, the revenue men pounced, but pointing to the moon's reflection the locals pleaded their attempts to rake in a round cheese. The revenue laughed at the addled ‘Moon Rakers’ and left. With pony hooves muffled contraband made its way along old lanes that bypassed villages and towns with resting places in haystacks, secret cellars and hollow walls.
For the smuggled wealth of today, the walls of the tax havens and banks are increasing made of glass. In 2016 HMRC gave the taxpayer opportunities under The Worldwide Disclosure Facility, a de facto partial amnesty, to disclose tax liabilities that related to offshore matters. In 2017 The Requirement to Correct was enacted to oblige taxpayers to correct any historic UK tax issues in respect to offshore income with tough financial penalties for those having not declared matters. In 2017 the UK also signed up to the Common Reporting Standard requiring some now 100 countries to share financial information to tackle tax evasion. In January 2018, the right was given for a court application for an Unexplained Wealth Order to require a person to explain how assets originated where they seem to be inconsistent with their income.
With this backdrop, in 2021 HMRC are likely to be given powers to demand information about a person’s assets, without their approval or court order, via a ‘Financial Institution Notice’ (FIN) requiring Banks, Financial Institutions and advisers to divulge information about customers without tax tribunal approval. The Lords debate their concerns about the FIN eroding taxpayer protection but the global trend is to pursue suspected criminality and tax evasion. In this Banks and Institutions are required to let the light shine through their walls and in this, the onus on compliance grows.
The Panama Papers, and such as Trump’s tax analysis has put avoidance and evasion firmly under the spotlight. Historically HMRC estimated tax avoidance cost £2.7 billion and evasion £4.4 billion with the total value of uncollected tax in the tens of billions. Greater tax efficiency will be needed to address the C-19 acquired levels of debt but more of that another time.
Thus it would be well to have one's tax affairs rigorously reviewed knowing that the walls of our financial conduct and those of our banks and institutions are now of glass. The ‘Moon Rakers’ of today will not be so lightly passed by as the Revenue officers of the 2020s are of a different metal.