Respect Crown Dependencies’ self-governing status, MPs told

David Richardson, interim director-general for customer strategy and tax design at HM Revenue and Customs, made the comment to the Commons Treasury sub-committee during a hearing as part of its tax avoidance and evasion inquiry.

Committee chairman John Mann said that HMRC was getting about a quarter of what it anticipated from a disclosure facility with the Crown Dependencies, adding: ‘Are you saying, therefore, that none of them are particularly co-operative?’

Mr Richardson said: ‘That is not a reflection on the Crown Dependencies; it is a reflection on the individuals who were investing in the Crown Dependencies as to whether they were prepared to use the opportunity to settle with us.

‘One needs to be careful not to regard the authorities in those jurisdictions as the same as the people who are investing there.’

Mr Mann added: ‘People listening might be puzzled.

‘You are remarkably keen to defend the Overseas Territories and Crown Dependencies in terms of how co-operative they are.

‘It would be useful if we could get a list of the meetings that take place with them, so we can see how often they are meeting with you.’

Mr Richardson said: ‘We have been remarkably keen to ensure they all engage with us constructively.

‘I am not promoting or otherwise the situation with the territories. Our concern has been to ensure they are transparent with us and with the rest of the world. They are, of course, self-governed territories. One has to respect that.’

On the request for information on meetings, the HMRC chief said: ‘I can certainly take that request away and see what we can do.’

During the hearing, committee member Stewart Hosie also asked why the disclosure facility with the Crown Dependencies launched in 2013 had seen its yield reduce from £1bn to £270m.

‘Does that mean people are smarter and wiser at hiding their money, was the amount of avoidance and evasion overstated or has it still been too difficult to identify where the culprits are?’

The UK exchequer had received money that it would not otherwise have received from the voluntary settlement scheme, replied Mr Richardson.

It also reflected the journey towards the ‘holy grail’ of the common reporting standard of automatic exchange of information.

Mr Hosie also said: ‘Is our view coloured because of the Fonseca papers and the Paradise papers, or are the Crown Dependencies and the OTs important, in terms of your work, in avoidance schemes?’

The Crown Dependencies and Overseas Territories featured in some of those schemes, said the HMRC chief.

However, he stressed they had all signed up to the common reporting standard and beneficial ownership registers – so that they could share information such as details of beneficial ownership of companies with the UK.

He added the common reporting standard was a ‘huge step forward’ with 100 territories around the world signing up to it: ‘I doubt it is the end of the road. I am sure there will be more things that we need to do and look at, but we need to give it a chance to see what impact it has.’