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| HMRC 'struggling to deal with fallout of Paradise Papers leak' | HMRC 'struggling to deal with fallout of Paradise Papers leak' |
| (about 20 hours later) | |
| Parliament’s spending watchdog says agency faces ‘potentially catastrophic consequences’ juggling effects of the leak, Brexit and 15 other programmes | |
| Rajeev Syal | |
| Fri 12 Jan 2018 00.01 GMT | |
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| HM Revenue and Customs is struggling to cope with a growing workload, including investigating revelations contained within the Paradise Papers, according to parliament’s spending watchdog. | HM Revenue and Customs is struggling to cope with a growing workload, including investigating revelations contained within the Paradise Papers, according to parliament’s spending watchdog. |
| The public accounts committee has warned that it is “far from confident” that the tax authority has sufficient resources to scrutinise claims published in the Guardian last year arising from a leak of 13.4m files. | The public accounts committee has warned that it is “far from confident” that the tax authority has sufficient resources to scrutinise claims published in the Guardian last year arising from a leak of 13.4m files. |
| In a report released on Thursday, MPs concluded that the Paradise Papers leak had highlighted the “potentially dubious practices of many high-profile individuals and corporations” that use offshore tax havens. | In a report released on Thursday, MPs concluded that the Paradise Papers leak had highlighted the “potentially dubious practices of many high-profile individuals and corporations” that use offshore tax havens. |
| The committee said the tax authority was having to make tough decisions about the allocation of its own resources, while implementing Brexit changes and 15 major programmes across government. | The committee said the tax authority was having to make tough decisions about the allocation of its own resources, while implementing Brexit changes and 15 major programmes across government. |
| Meg Hillier, the chair of the committee, said that HMRC’s “high-wire act” is facing “potentially catastrophic consequences” for taking on too many tasks at the same time.” | Meg Hillier, the chair of the committee, said that HMRC’s “high-wire act” is facing “potentially catastrophic consequences” for taking on too many tasks at the same time.” |
| She added: “HMRC accepts something has to give and it now faces difficult decisions on how best to use its limited resources – decisions that must give full consideration to the needs of all taxpayers. | She added: “HMRC accepts something has to give and it now faces difficult decisions on how best to use its limited resources – decisions that must give full consideration to the needs of all taxpayers. |
| “These are serious, pressing challenges for HMRC, requiring swift and coordinated action in government.” | “These are serious, pressing challenges for HMRC, requiring swift and coordinated action in government.” |
| Most of the documents – 6.8m – relate to a law firm and corporate services provider that operated together in 10 jurisdictions. Among dozens of revelations, which were published in 96 media outlets, the papers showed how the Queen’s private estate invested in a Cayman Islands fund and the offshore dealings by Donald Trump’s cabinet members. | Most of the documents – 6.8m – relate to a law firm and corporate services provider that operated together in 10 jurisdictions. Among dozens of revelations, which were published in 96 media outlets, the papers showed how the Queen’s private estate invested in a Cayman Islands fund and the offshore dealings by Donald Trump’s cabinet members. |
| The report points out that a previous leak of data, known as the Panama Papers, resulted in 66 criminal or civil investigations and an expected additional tax revenue of £100m. | The report points out that a previous leak of data, known as the Panama Papers, resulted in 66 criminal or civil investigations and an expected additional tax revenue of £100m. |
| MPs have recommended that the tax authority should respond to the latest disclosures by March and tell the committee how much additional revenue is likely to be at stake. | MPs have recommended that the tax authority should respond to the latest disclosures by March and tell the committee how much additional revenue is likely to be at stake. |
| “HMRC now claims to be better equipped to deal promptly with any large-scale leak of data,” the report said. | “HMRC now claims to be better equipped to deal promptly with any large-scale leak of data,” the report said. |
| “However, the speed with which cases can be investigated depends on whether they are civil or criminal, as criminal cases will take longer to prepare. We are far from confident that HMRC has sufficient resources to deal with the full scale of the recent allegations.” | “However, the speed with which cases can be investigated depends on whether they are civil or criminal, as criminal cases will take longer to prepare. We are far from confident that HMRC has sufficient resources to deal with the full scale of the recent allegations.” |
| It points out that HMRC has requested documentation but has not yet received a response. | It points out that HMRC has requested documentation but has not yet received a response. |
| A Guardian spokesman said the tax authority has powers to request data from the organisations concerned and investigate these matters. | A Guardian spokesman said the tax authority has powers to request data from the organisations concerned and investigate these matters. |
| “We have only had access to the data through our partners at the International Consortium of Investigative Journalists (ICIJ),” he said. “We understand that HMRC has already been in touch with them.” | “We have only had access to the data through our partners at the International Consortium of Investigative Journalists (ICIJ),” he said. “We understand that HMRC has already been in touch with them.” |
| Tax officials have told the committee that projects linked to the UK’s EU withdrawal could add 15% to its workload, the report said. | Tax officials have told the committee that projects linked to the UK’s EU withdrawal could add 15% to its workload, the report said. |
| The committee said the transformation programme under way at HMRC – involving office closures, relocation of staff into 13 regional centres and digitalisation of tax returns – is “not deliverable” as originally envisaged due to the increased pressures. It added that the agency estimates it will fall short of its 2020 target of £717m savings by £10m. | The committee said the transformation programme under way at HMRC – involving office closures, relocation of staff into 13 regional centres and digitalisation of tax returns – is “not deliverable” as originally envisaged due to the increased pressures. It added that the agency estimates it will fall short of its 2020 target of £717m savings by £10m. |
| It gave HMRC a deadline of April to set out how it will respond to growing pressures. | It gave HMRC a deadline of April to set out how it will respond to growing pressures. |
| Revenue sources said that the BBC, ICIJ and the Guardian have not yet handed over documentation related to the Paradise Papers, which could take months to analyse. | Revenue sources said that the BBC, ICIJ and the Guardian have not yet handed over documentation related to the Paradise Papers, which could take months to analyse. |
| An HMRC spokesperson said: “Following the Paradise Papers data leak, HMRC continues to look very closely at the information disclosed in the public domain, to see if it reveals anything new that could add to existing leads and investigations. | An HMRC spokesperson said: “Following the Paradise Papers data leak, HMRC continues to look very closely at the information disclosed in the public domain, to see if it reveals anything new that could add to existing leads and investigations. |
| “Since 2010, HMRC has secured an extra £160bn by tackling tax avoidance, evasion and non-compliance, including £2.8bn from customers who tried to hide money abroad to avoid paying what they owe.” | “Since 2010, HMRC has secured an extra £160bn by tackling tax avoidance, evasion and non-compliance, including £2.8bn from customers who tried to hide money abroad to avoid paying what they owe.” |
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