Tuesday, April 14, 2009

A reminder: exchange of information can work

Accountancy magazine quotes a senior chartered accountant as saying that the cost of filtering through information obtained in the proposed global crackdown on tax havens may outweigh the revenue raised:

"There’s so much data they don’t know what to do with it. How will HMRC deal with it?"

This is nonsense, as Richard Murphy points out:

"The suggestion that there are ‘shed loads of returns’ to process is deliberate misinformation. You would think that information exchange was done through the sending of a pile of cardboard files. It isn’t: this is electronic data. It is a list that includes a taxpayer’s reference number (if known), their name, residential address, details of the bank at which an account is held and account number information and details of the income paid to new account during the course of a tax year. Processing it is about as difficult as sorting a pile of data on an Excel spreadsheet.
. . .
Every bank in the UK sends information on every customer to whom they pay interest in this country to HM Revenue and Customs every year. That is tens of millions of items of data.
. . .
HM Revenue and Customs identified no more than 200,000 accounts of interest to them in the 2007 tax amnesty. To suggest that HM Revenue and Customs can manage tens of millions of items of data but that another 200,000 would overload the system is obviously absurd."

And he makes a few other points, worth reading.


Blogger Fred Fry said...

This of course assumes that all payments into an account explain the reason of the payment.

Also, the exchange of information push disregards a right to privacy and presumption of innocence.

That does not apply everywhere but if there is a push for this elsewhere, it will push accounts to the US to take advantage of these rights.

9:19 am  

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