HMRC is now tracking 277 British businesses it suspects of using ‘tax havens’ to artificially reduce their tax bills in the UK, according to a City law firm.
HMRC is concerned that some UK businesses are still avoiding tax in the UK by recording income in countries with zero or near-zero corporation tax.
Countries traditionally seen as tax havens include the British Virgin Islands, Cayman Islands and Bermuda.
HMRC has now received data on 277 businesses from tax authorities in 12 tax havens over the past year as part of its ‘no or only nominal tax jurisdiction project’, lawyers at law firm Pinsent Masons told City A.M. this morning.
This project is operated by the intergovernmental body the Organisation for Economic Co-operation and Development (OECD), involving tax authorities in 38 member states.
Under this initiative tax authorities in tax havens must provide information on the identities, activities and ownership of multinational businesses reporting revenue in their countries to HMRC and other tax authorities within the programme.
This information can then be used by HMRC to open investigations and levy penalties where it believes UK tax has been unlawfully avoided or evaded.
The 12 tax havens are Anguilla, Bahamas, Bahrain, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Turks and Caicos Islands and the United Arab Emirates.