Tax havens agree crackdown on tax evasion
Tax havens are to commit to disclose the bank details of British taxpayers, as campaigners challenge an alleged deal allowing Goldman Sachs to skip a multi-million-pound interest bill on unpaid tax.
Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands have all agreed to automatically share information with the UK in a crackdown on tax evasion.
The British overseas territories will pass on names, addresses, dates of birth, account numbers, account balances and payment details and the move also extends to some accounts held by trusts.
They will also share information with other G5 nations – France, Germany, Italy and Spain – as part of an international pilot to clamp down on wealthy banking clients who escape paying taxes by hiding their money overseas.
According to the Treasury, the Isle of Man, which was the first non-US jurisdiction to agree to greater exchange of information with the UK, will also extend information to the four other nations involved in the scheme.
Top priority
It comes ahead of the UK’s presidency of the G8, which Prime Minister David Cameron vowed would see tax transparency as a top priority.
Chancellor George Osborne said the agreement marked a turning point in the fight against tax evasion.
“This represents a significant step forward in tackling illicit finance and sets the global standard in the fight against tax evasion,” he said.
“I now hope others follow these governments’ lead and enter into similar commitments to this new level of transparency, removing the hiding places for those who seek to evade tax and hide their assets.”
However speaking to Channel 4 News, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance said that while the agreement was a step forward, it did not fully address the issue.
He said: “International co-operation on transparency will help reduce tax evasion. But the measures are a side-show that don’t address the fact that our tax system is fundamentally dysfunctional.
“We need comprehensive reform to simplify our needlessly complex tax code and reduce the punishingly high rates which drive money out of the UK, legally and illegally.
“We need a much simpler system that encourages investment into the UK and ensures that everyone pays their fair share of tax, no more and no less.”
‘Sweetheart’ deal
The deal comes as tax avoidance campaigners prepare to challenge an alleged “sweetheart” deal between HM Revenue & Customs (HMRC) and Goldman Sachs.
UK Uncut Legal Action is seeking a high court declaration that an agreement allowing the banking giant to skip a multi-million-pound interest bill on unpaid tax on bonuses was unlawful and in breach of the taxman’s own guidelines.
It wants £20m allegedly involved to be returned to the public purse.