Taxman chases offshore accounts

Tax evaders are beginning to quake in their boots as the Inland Revenue widens its search for anybody who’s trying to get away with it. Last year the taxman collared £400 million by raiding accounts in global tax havens. It’s estimated to be a fraction of the monies which could be raked in. The taxman wants to drag in another £7 billion in unpaid taxes.

Now the Revenue’s powers have been widened. The new aggressiveness is propelled in part by the government’s determination to find money to fill the massive black holes which are beginning to appear across the public finance accounts.

Black holes – large scale deficits - are because of the billions of pounds that have been shelled out from the public purse in the government’s desperate attempts to stave off bankruptcy in the financial sector and the wider economy.

Money which has been squirreled away in Guernsey – a favourite Channel Island tax shelter for UK investors and savers – will now come under the beady eye of the tax inspector. Guernsey has just signed an agreement with Britain which allows inspection of once-closed company and individual accounts.

The Guernsey move comes soon after the Revenue set up a special unit to investigate the richest taxpayers. Four months ago a deal was made with the British Virgin Isles which gives access to accounts by tax men. The Inland Revenue already has an agreement in place with Bermuda and the Isle of Man – two more favourite tax hideaways.

Surveys and opinion polls indicate a growing disquiet in Britain on the part of the electorate about what is perceived as a two-tier society with the poorest half propping up the richest half comprising large numbers of people and companies ‘getting away with it.’

There are still many tax hideaways. Monaco on the Riviera is a favourite for business people, so-called ‘celebrities’ and sports stars. Some companies are registered in relatives’ names and based offshore. The companies and individuals behind them earn millions of pounds in profit in Britain and sometimes employ thousands of people.

But as the crisis has deepened the idea that monies generated by the very rich ‘ trickle ‘ down in a nebulous way through the economy is coming under renewed scrutiny.

And the arguments about the rich giving employment are becoming thin as Britain approaches two million workless with three million predicted by the end of this year.

Concerns that the super rich would up sticks and go elsewhere are looking less convincing. This is a worldwide crisis. A full blown slump is said to be close by many experts. The number of stable and secure options left open to very rich who would wish to flee with their money and perhaps set up business elsewhere are quickly diminishing.

A high level economist who did not want to be named said: “ The amounts of money that could be recouped from the very rich sound breathtaking on an individual basis. However, when set against the national debt they would not make much difference.

“But with widespread hardship in the country it would boost morale for millions of people to know that the wealthy are subject to the national tax laws like everybody else.

“Governments which get out of touch with the people end in tragedy. Terrible events can be triggered if the populace think the rich are getting richer on the backs of the poor who are getting poorer. Look back in history to see the cataclysmic happenings that can spring from high unemployment and a tax system which is perceived to be inequitable. Whether it is or not is immaterial. In times of crisis it’s the perception which can be the catalyst.”