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HMRC Reviewing 'Panama Papers'

by Robert Lee,, London

05 April 2016

UK tax authority HM Revenue and Customs (HMRC) has confirmed that it has asked the International Consortium of Investigative Journalists (ICIJ) to share the leaked data it obtained from Panamanian law firm Mossack Fonseca.

In a statement, HMRC said that it intends to cross-reference the data with its own database of intelligence, "Connect." This will enable it to determine "if it adds to the 700 current leads we already have with a link to Panama."

"We will closely examine this data and will act on it swiftly and appropriately, where we suspect that UK tax has been evaded," the statement added.

The so-called "Panama papers" contain more than 11.5m documents belonging to Mossack Fonseca. The data includes emails, financial spreadsheets, passports, and corporate records relating to the ownership of bank accounts and companies in 21 offshore jurisdictions. It covers a nearly 40-year period, through to the end of 2015.

Mossack Fonseca said that it strongly disagreed "with any statement implying that the primary function of the services we provide is to facilitate tax avoidance and/or evasion." It added that it "does not advise clients on the structuring of corporate vehicles and the use they may make of [the] same; and we likewise do not offer solutions whose purpose is to hide unlawful acts such as tax evasion."

HMRC said that the data it receives and the leads it is pursuing will not necessarily prove wrongdoing or result in fines or convictions. "Such data is often incomplete or years out-of-date or does not contain the information required to identify individuals. But it can help build a bigger picture which allows us to join the dots and catch tax evaders," it explained.

In 2014-15, HMRC received 86,000 separate leads, and collected around 100 million items of data through a combination of intelligence gathering, bulk data, and expert investigations. It collected and secured GBP26.6bn (USD37.9bn) from compliance activities in 2014-15, up 43 percent on the GBP18.6bn collected in 2011-12.

HMRC's specialist offshore unit is currently investigating over 1,100 cases of offshore evasion, and more than 90 individuals are subject to criminal investigation.

The Government is investing an additional GBP800m in HMRC's compliance and anti-evasion work. It has introduced higher financial penalties for those engaging in offshore evasion, and new civil penalties for those found to be enabling tax evasion. It is also legislating for a new criminal offense for corporations that fail to prevent the facilitation of tax evasion, and for a strict liability criminal offense for offshore evasion.

Jennie Granger, Director General of Enforcement and Compliance at HMRC, said: "We have brought in more than GBP2bn from offshore tax evaders since 2010 and the Government has repeatedly strengthened our powers and resources with new criminal offenses and higher penalties, so we can take even tougher action against the minority who try to cheat the honest minority by hiding their money in offshore tax havens."

TAGS: individuals | compliance | tax | tax compliance | tax avoidance | law | United Kingdom | tax authority | offshore | tax planning | HM Revenue and Customs (HMRC) | penalties | HM Revenue and Customs (HMRC) | Panama | Tax | Tax Evasion

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