Tuesday, November 17, 2009

Dave Hartnett: Britain's tax enforcer

Britain's Daily Telegraph newspaper is carrying a long interview with Dave Hartnett, the permanent secretary at Her Majesty's Revenue and Customs (HMRC,) with a wealth of interesting material and anecdote. For instance:

"I think our top priority right now is the work we are doing to end tax secrecy, particularly in tax havens.”

Which is heartening, though not quite so heartening once we consider that the pro-offshore Conservative Party is likely to be in power by the middle of next year, with an attitude summed up neatly here. Hartnett talks his own book in this interview and pats himself on the back a fair bit - we know from our own contacts that he is much, much softer on corporations than the image he likes to portray -- but the interview is still well worth reading, for its assorted snippets.

Among other things, he has served notices on 308 banks at home and abroad asking for details about foreign accounts held by their British customers.

"He expects the amnesty and bank data will provide details of half a million offshore bank accounts.'We expect 20pc of them to contain income gains or profits that should have been taxed,' he says. 'So arguably 100,000 people will have to make their peace with us.' . . . The pre-Budget review on December 9 is expected to announce a crackdown on tax."

If properly followed through, which we'll believe when we see it, that will be a vast political issue.

On banks, he says

"The banks have three roles. They provide schemes for tax avoidance for others; they use avoidance themselves and they fund schemes."

It is shocking that they have been allowed to - and continue to be allowed to - undermine our democracies like this. As if the interlinked economic crisis wasn't enough reason for them to feel ashamed. This may help, but much more is needed.

His comments on Liechtenstein -- where whistleblower information has revealed a lot of British tax-dodgers -- are eye-opening too:

“I didn’t expect to see such extraordinary sums of money and some pretty dirty deals as well. I never thought it would happen,” he said. It is taking time for the new tax stream to flow, not least because the disks are in German: “I don’t expect any money to flow from the Liechtenstein arrangement until at the earliest the middle of next year and because the trust structures are so complicated it will be another year before the money really starts to flow but we are talking about significant amounts.”

The disks have been a goldmine of information, not all of it useful for HMRC. “There’s big bribes, very big bribes, money hidden by revolutionary leaders, people squirrelling away part of their income and professional people. They are going to be in pretty serious difficulty with us,” says Hartnett.

And guess what? The Swiss have not been co-operating.

"He is champing at the bit to gain access to the holy grail of tax havens. The Swiss gnomes, however, are masters of the art of secrecy and have only made modest concessions to representations from Hartnett and his international tax colleagues but another whistleblower has excited him with information about more secret bank accounts. “I can’t say anything more,” he says with a smile."


Again, we await further developments with great interest.

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