Over 143 countries are sharing data in a bid to deter tax avoidance and tax evasion. Not content with existing treaties and protocols, these countries have chosen the Common Reporting Standard (CRS) an automatic route for sharing data and tax information in a bid to bolster their own and each others country’s tax revenues.
What exactly does “tax information” consist of?
It would seem that confidentiality has gone out of the window. Equally, what checks are carried out on that “tax information” to ensure it is factually correct rather than hearsay?
There is guidance as to what constitutes tax information starting with a person’s name and address going on to quoting actual account details. But nobody ever follows guidance and so “extra” information will no doubt be supplied and gratefully received by HMRC.
Not surprisingly more and more I am finding that HMRC are making spurious challenges to taxpayers based upon “information received”.
Historically, the UK has sought to obtain information on taxpayers from other tax jurisdictions but the process of doing so was slow and cumbersome. It is now the target of HM Revenue & Customs (HMRC) to enable speedier and wider access to such data whilst at the same time making it easier for other countries to ask for reciprocal data of both a business and personal nature.
What is a large sum of cash – £10,000 or £100,000 or £1,000,000?
Countries used to have Exchange Controls as a mechanism for preventing the movement of cash derived from various sources, including tax evasion. There is still a limit of 10,000 euros within the European Union but only in so far as having to declare that a person is carrying in excess of that amount rather than stating the source of the funds. If you carry more than 10,000 euros and are stopped without having declared the fact, all or part of the funds can be seized and permanently.
Most things are relative. For some, £10,000 is a lot of money but for others it is not. People travelling overseas for business or pleasure are likely to carry cash for legitimate purposes. Some would argue that carrying “bags of cash” is stuff of a bygone era. There are some though, that have an in-built distrust of the banking system and will to this day prefer to carry large sums of cash.
Where will it end?
Soon we will be in an era of real time exchange of information through the use of HMRC’ Connect software rather than working on a turnaround in 5 working days. This may even mean that one day HMRC can be waiting to greet you off the plane, train or boat if there is a suspicion of tax being evaded.
In the meantime, perhaps HMRC should carry on with the filing!
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