Foreign investigators turn to Britain to tackle tax avoidance

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Jul 10, 2017
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HM Revenues and Customs is working more closely than ever with its counterparts overseas to eliminate abuse of tax systems

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Overseas governments made more than 2,000 requests to the UK tax authorities for help with tax abuse investigations last year, nearly 25 per cent more than in 2015.

HM Revenue and Customs received 2,015 requests for help with investigations into taxpayers from overseas jurisdictions last year, up 24 per cent on the number received in 2015. 

The figures, disclosed in a response to a freedom of information request, indicate that tax authorities worldwide are stepping up their efforts to eliminate abuse. Pinsent Masons, the City of London law firm that made the request, said that the rise was in line with a global clampdown on suspected tax avoidance and evasion “as public and political pressure mounts to ensure that large businesses and high-net-worths pay their fair share of tax”.

The firm says that in the wake of high profile tax avoidance cases involving multinational companies and mega-wealthy individual – including those relating to the Panama Papers scandal in 2015 – authorities have increased collaboration and information exchange to identify and clamp down on abuses. The requests to HMRC were made using “direct tax instruments”, which allow different jurisdictions to exchange information on the tax affairs of individuals and businesses operating cross-border. 

These instruments include bilateral double taxation agreements, bilateral tax information exchange agreements and information sharing agreements overseen by the Organisation for Economic Co-operation and Development.

Paul Noble, tax director at Pinsent Masons, said: “HMRC is working more closely than ever with overseas tax authorities as it works to stamp out suspected underpayment of tax- both corporate and personal. The high number of requests is indicative of a more hard-line approach globally.”

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