HMRC has hit back at suggestions that tax amnesties, such as the deals reached recently with Switzerland and Luxembourg, could help criminals gain respectability.
Jonathan Fisher QC claimed last month in a speech to the 29th International Symposium on Economic Crime at Jesus College, Cambridge, that the amnesties risk turning HMRC into “one of the largest money-laundering operations in history.”
Describing the Swiss agreement as a “grubby little deal”, Mr Fisher urged Parliament to intervene to prevent misguided tax amnesties being misused by organised crime.
He said: “Organised criminals set up or take over legitimate companies and predict excessive corporation tax profits for the company year. The companies pay large sums in provisional tax based on predicted profits, with these monies having been derived from criminal activity. Later, the company’s accountant approaches the tax authority to explain that profits had been far lower than anticipated and in this way obtain a tax rebate.”
“The second way in which HMRC has found itself penetrated by criminals for money laundering purposes takes place with the active encouragement and support of the Government.”
“Since 2007 HMRC has offered taxpayers a variety of different disclosure opportunities to encourage the voluntary disclosure of taxable income on hidden assets in return for beneficial tax treatment. The opportunity presented to money launderers to legitimatise the monies from their illegal activities and bring them into the financial system is colossal.”
HMRC have dismissed the claims saying they have robust measures in place to prevent fraud against the tax system.
If you want more information then please contact Rodliffe Accounting Ltd.