The UK’s tax authority is tracking an increasing number of firms suspected of using tax havens, new data reveals.
HMRC is now tracking 512 UK firms that are suspected of failing to conduct enough business activities in those tax havens to legitimately claim they operate there, according to data obtained by law firm Pinsent Masons via a Freedom of Information request.
This marked an 84 per cent increase on the 277 UK firms the authority was monitoring at the same time last year, the firm said.
The increased scrutiny comes as part of the OECD’s ‘No or Only Nominal Tax Jurisdiction’ project, which looks to monitor companies’ activities in 12 known tax havens, including UK overseas territories Cayman Islands and British Virgin Islands.
Under the initiative, these 12 tax havens must now report the identities, business activities and ownership of multinational businesses reporting revenue in their country or territory.
As a result, HMRC now receives more data on firms in those tax havens, which it can use to open investigations if it suspects UK tax has been unlawfully avoided or evaded.
“HMRC now shares and receives more information with its equivalents worldwide than ever before,” Jake Landman, a tax specialist and partner at the firm, said. “For UK companies using tax havens illegitimately, it’s now a matter of when, not if HMRC comes calling.”
A HMRC spokesperson said: “We have secured around £526 million from offshore initiatives since 2019, underlining our commitment to address all forms of non-compliance and ensure the right amount of tax is paid, to fund the UK’s vital public services.”