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HMRC's Liechtenstein pay-out 'not surprising'

25 February 2008
Categories: News , disclosure , Hartnett , HMRC powers , Liechtenstein , Admin , Income Tax
But legality of move is grey area, claims tax expert

HMRC have refused to discuss their payment for details of bank accounts held in by wealthy British tax evaders in the tax haven of Lichtenstein.

Reports have claimed the department paid up to £100,000 to an informant who allegedly stole the records while working an employee of LGT, the country's largest bank.

HMRC admitted they had made the deal with the informant - reported to be called Heinrich Kieber - but said they could not 'talk in detail' about the story.

However, the Revenue stressed it was 'authorised to make such payments, and would ensure that the information was well based before making any payment'.

Acting chairman Dave Hartnett noted that 'HMRC is determined to protect the UK's tax base from evasion, and in doing so we will use all the statutory powers we have.

This position has been backed by comments from tax expert John Whiting.

John, a tax partner at PricewaterhouseCoopers, noted that HMRC have long had the power to reward those who provide information, and have had 'a certain amount of success' as a result.

'It has possibly been a surprise to some people that such powers exist,' he said. 'They are normally kept quiet, for obvious reasons — and they are usually used only as a back-stop once all other methods have been employed.'

John added that amounts paid were 'usually pretty modest', and he admitted that the £100,000 said have been handed to the Lichtenstein informant was 'unusual'.

However, he said it remained to be seen if 100k was excessive: 'If it leads to hundreds of thousands of taxes being retrieved, it won't be a bad rate of return'.

Claims that the Lichtenstein data was stolen created something of a grey area, said John.

'It doesn't smell too fragrant if HMRC are condoning a crime,' he remarked. 'But the bottom line is that it is to detect another crime.

'These are people who have been evading taxes — and it's serious evasion.

'The question is: do two wrongs make a right?'

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