HMRC to receive powers to enforce disclosure of assets
HM Revenue & Customs (HMRC) will be given new powers that will allow it to force financial institutions to provide information about people’s assets.
The firms will be required to pass on customer information if served with a “financial institution notice” by HMRC under new measures proposed in the next finance bill.
It will mean a court or the individual’s approval is no longer required. Currently consent is provided by the individual or a tax tribunal must approve the request.
The financial institutions covered include banks, investment advisers, fund managers, credit unions, insurance companies and credit card issuers.
The government’s proposal could come into effect as soon as next year.
The thinking behind the idea is that it will make it quicker and easier for HMRC to share information with foreign tax authorities as part of a global crackdown on tax evasion.
However, the move has caused concern in some quarters.
The Chartered Institute of Taxation said it was “concerned about the loss of independent tribunal oversight, particularly in cases which involve requests for information about UK taxpayers”.
Meanwhile, UK Finance said the measures signified a “watering down [of] safeguards”.
HMRC said it was important in the battle against tax evasion and avoidance and would help them deal with it in “an appropriate and effective way”.
“The new notice will contain numerous safeguards for taxpayers, in line with practice in all other G20 countries, and the power can only be used in specific circumstances where the information is reasonably required for the purposes of checking a taxpayer’s tax position,” the tax authority said.