Crime and Tax Avoidance

(asked on 2nd December 2020) - View Source

Question to the HM Treasury:

To ask Her Majesty's Government what progress they have made in addressing (1) tax avoidance, (2) fraud, and (3) money laundering.


Answered by
 Portrait
Lord Agnew of Oulton
This question was answered on 16th December 2020

Since 2010 this government have secured and protected over £250 billion that would otherwise have gone unpaid due to tax related fraud, avoidance, evasion and other forms of non-compliance within the tax system. During this time we have introduced over 120 new measures and invested over £2 billion extra in HM Revenue & Customs (HMRC) to tackle all forms of tax fraud and non-compliance. This includes £63 million in additional funding for HMRC in 2020/21 to ensure that more of the tax that is owed is collected.

HMRC achieved its commitment, made at Summer Budget 2015, to raise an additional £5 billion a year by 2019/20 by tackling tax avoidance and aggressive tax planning, evasion and other non-compliance.

The UK tax gap (the difference between the amount of tax that should, in theory, be paid and what is actually paid) in tax year 2018/19 (the latest figure available) is estimated to be 4.7% (£31 billion). The tax gap has fallen from 7.5% in 2005 to 2006, showing a long term downward trend.

Tackling financial crime remains an important priority for the government. We are committed to preventing money laundering, financial exploitation and fraud, closing down vulnerabilities in the system that may be exploited by criminals and hostile actors and ensuring members of the public have the information they need to spot a scam and stand up to fraudsters. We continue to work closely with industry on these issues.

In 2019, the Government and private sector jointly published a landmark Economic Crime Plan which brought together the Government, law enforcement and the private sector in closer cooperation than ever to deliver a whole system response. This Plan sets out 52 actions of which 13 have been fully completed. We plan to publish a detailed update on ECP actions in the new year.

This year, the government completed its transposition of the EU’s Fifth Money Laundering Directive, bringing new sectors into scope for money laundering regulation, including cryptocurrencies, the art market, and the letting sector. We also significantly expanded the scope of the Trusts Registration Service in order to drive greater transparency of who ultimately owns trusts that present a money laundering or terrorist financing risk. This ensures our system remains responsive to emerging threats and is in line with evolving international standards set by Financial Action Task Force.

We have made significant process on the UK Financial Intelligence Unit (UKFIU) staffing uplift, who will undertake greater analysis of SARs reports and provide more timely and meaningful feedback to reporters, with c.130 staff currently in post (up from c.80 at the time of the Financial Action Task Force (FATF) review in 2018).

The government is also committed to ensuring the UK’s anti-money laundering supervision system is effective and consistent across the 25 supervisors. HM Treasury publishes annual reports on the performance of the AML/CFT supervision system, most recently in August 2020. In 2018, the government introduced legislation to create the Office for Professional Body Anti Money Laundering Supervision (OPBAS). OPBAS’s remit is to ensure a consistently high standard of AML supervision by the 22 professional body supervisors and facilitate information sharing between AML supervisors and law enforcement agencies.

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