'UK residents had £850bn in financial accounts overseas — of which £570bn was based in tax havens — in 2019, the latest year HMRC has released statistics for.'

In a rather damning revelation, the UK tax authority has admitted that it has no idea just how much tax is being evaded through offshore assets held by UK residents, with hundreds of billions of pounds being held in tax havens.

Following a freedom of information request, The Financial Times reported that ‘UK residents had £850bn in financial accounts overseas — of which £570bn was based in tax havens — in 2019, the latest year HMRC has released statistics for.’

The figures come from financial data shared by more than 100 countries with HRMC.

The FT reports that when asked if HMRC had used the data to find out what proportion of UK residents had properly reported their overseas accounts, HMRC said it had not.

“We have not produced or received any estimates, analysis or statistical information as to what proportion of the foreign financial accounts have been ‘properly disclosed’, nor can this be accurately inferred in the data we hold,” HMRC said.

Reacting to the story, Jo Maugham, Director of the Good Law Project tweeted: “HMRC knows that £850bn – about 6% of the UK’s total net household wealth – is being held in tax havens. But it has made precisely no checks on how much of it has been properly reported. Astonishing story.

“HMRC’s disinterest in the kind of tax avoidance and evasion that the super-wealthy engage in is a long-standing national scandal. It’s not easy to find non-cynical explanations for it. Perhaps they’re afraid of what and who they might turn up?”

LFF columnist Prem Sikka tweeted: “Scandalous. HMRC says it has no idea how much tax is evaded by UK residents holding £850bn in assets/accounts overseas, including  £570bn in tax havens. Normal people taxed to the hilt, rich tax dodgers are unchecked. Criminals not investigated/prosecuted.”

Alex Cobham, chief executive of the Tax Justice Network described the revelations as ‘extraordinary’. He tweeted: “For HMRC to have access to this data on foreign financial accounts of UK tax residents, and to *not* use it in combination with tax returns to analyse the scale and distribution of tax abuse, is – as the FT quotes me – ‘an outright dereliction of its duty’.

“This refusal to assess tax evasion relates to a stock of some £850 billion held offshore, the great majority in secrecy jurisdictions – so both the locations and the taxpayers (top incomes) are those that research tells us are dominant in tax abusive behaviour.”

The shocking revelations come at a time when ordinary families up and down the country struggle with the cost of living crisis, with child poverty expected to hit record levels.

Basit Mahmood is editor of Left Foot Forward

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