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Taxation

Volume 706: debated on Thursday 18 December 2008

Question

Asked by

To ask Her Majesty's Government what estimate has been made of the loss to Her Majesty's Revenue and Customs from non-payment of income tax by United Kingdom subjects holding savings deposits in financial institutions in (a) the Isle of Man, and (b) Guernsey. [HL267]

In March 2008 HMRC released details of some analysis from 2005 that attempted to derive estimates of the direct tax gap at the start of the decade—see www.hmrc.gov.uk/research/direct-tax-gaps.pdf. This included a very broad-brush estimate of the tax gap associated with the use of offshore accounts. For conditions in 2002-03, the annual loss of tax through evasion using offshore accounts was estimated to be between £80 million and £140 million for the Isle of Man and between £60 million and £90 million for Guernsey.

As HMRC has made clear, these figures are estimates only. They are far from certain and are based on assumptions which may be incorrect.