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HMRC Reaching Out To Foreign Tax Authorities

by Robert Lee,, London

24 March 2015

Research by international law firm Pinsent Masons has revealed that, in 2013, HM Revenue and Customs (HMRC) made 490 information requests to foreign governments under the terms of the UK's double taxation agreements (DTAs).

James Bullock, Partner at Pinsent Masons, said: "HMRC's efforts to identify those who may be under-declaring overseas income and gains are now running at a very high pace. There is now a global drive against the suspected underpayment of taxes – reflected in new legislation and international agreements to increase the cross-border transfer of information."

"Many UK High Net Worths are now living, making investments, and conducting business abroad. A sizeable number will have highly complex tax affairs across multiple jurisdictions, and as the amount of information available to HMRC increases, they are likely to come under more intense scrutiny."

Ireland, the Netherlands, and France were among the countries that most frequently received requests from HMRC. Ireland received 54 requests in 2013, up 50 percent on the previous year. The Netherlands received 35 requests, up 169 percent on 2012. France received 21, down slightly from the 28 received in 2012.

Bullock said that the high number of requests made to Ireland is likely to reflect the large number of people of Irish origin living permanently in the UK. He pointed out that "ten or so years ago there was a major HMRC campaign surrounding funds held in Irish bank accounts remaining undeclared in the UK - and there is likely to be on-going scrutiny resulting from this."

Bullock added that the success of a recent tax amnesty in the Netherlands could explain the proportion of HMRC requests directed there, as the Dutch tax authorities "are now likely to possess a wealth of information on which they can draw when presented with these inquiries." A large number of professionals also alternate working in the Netherlands and the UK. In the case of France, Bullock noted that there is a significant French population living in the UK and working in the financial services sector, as well as a large number of UK citizens owning property in France and/or living there in retirement.

The number of requests foreign governments made to HMRC totaled 2,466 in 2013.

TAGS: compliance | tax | investment | business | tax compliance | Ireland | Netherlands | tax avoidance | law | financial services | retirement | United Kingdom | offshore | agreements | professionals | legislation | France | revenue statistics | penalties | services | Tax | Tax Evasion

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