Paradise Papers

Part of the debate – in the House of Commons at 3:39 pm on 6th November 2017.

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Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General 3:39 pm, 6th November 2017

The Government believe in a fair tax system where everyone plays by the rules. It is this Government who have taken decisive action to tackle tax avoidance and evasion and to improve the standards of international tax transparency. The UK has secured an additional £160 billion in compliance revenue since 2010—far more than was achieved under the last Labour Government. Under this Government, the UK now has one of the lowest tax gaps in the world. We have provided Her Majesty’s Revenue and Customs with tough new powers. In 2015, HMRC received £800 million in additional funding to go on tackling tax avoidance and evasion.

Let me turn to recent events. Yesterday evening, several international news organisations, led by the International Consortium of Investigative Journalists, reported on an information leak regarding the financial affairs of a large number of individuals. I should remind the House at this stage that Ministers do not intervene in the tax affairs of individuals or businesses, as to do so would be a breach of taxpayer confidentiality. However, I can inform the House that, on 25 October, HMRC requested that the ICIJ, The Guardian and the BBC share the leaked data so that this information can be compared with the vast amounts of data that HMRC already holds due to the initiatives this Government have undertaken. They have yet to respond to this request.

Nevertheless, since these data were retrieved in 2016, the Government have implemented international agreements that have changed the game for those seeking to avoid and evade their taxes. HMRC is already benefiting from the automatic exchange of financial account information through the common reporting standard—an initiative in which the UK has led the world, with over 100 jurisdictions signed up. The Crown dependencies and overseas territories are among those signed up to this initiative, and have been exchanging information with HMRC for over a year. The Crown dependencies and overseas territories have also committed to holding central registers of beneficial ownership information, which the UK authorities are able to access.

It is important to note, and I quote the ICIJ’s disclaimer here:

“There are legitimate uses for offshore companies and trusts” and the ICIJ does

“not intend to suggest or imply that any people, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly.”

So, notwithstanding the generalised aspersions made by the Opposition, the use of offshore accounts or trusts does not automatically mean dishonesty. But this House should be assured that, under this Government, HMRC will continue to bear down with vigour on any tax avoidance or evasion activity, wherever it may be found.