HMRC has responded to a startling claim that the UK loses more than £20billion a year in tax to offshore wealth.
Data from the Tax Justice Network claims an estimated £135.8billion in tax revenue is lost every year from those utilising tax havens to dodge their tax contributions.
Between them, the report states the United States and the United Kingdom account for 39 percent of the annual tax revenue lost to offshore wealth.
It estimates that the United States alone loses over £30.1billion a year in tax revenue, while in the United Kingdom, the figure surpasses £22.5billion annually.
Bradley Post, MD of RIFT, noted that, while this figure only equates to less than one percent of GDP, “it can have a detrimental effect on social compliance” and demonstrates “a lack of accountability and a sign of weakness where the Government is concerned.”
However, an HMRC spokesperson told Express.co.uk: “These estimates are neither credible nor accurate. They’re based on crude assumptions resulting in inaccurate figures.”
‘The Tax Justice Network’ report attempts to estimate offshore tax abuse for every country in the world – including the UK.
HMRC said the methodology estimates each country’s total offshore wealth based on assumed crude aggregated net capital outflows and that these are all tax non-compliant, then applies an assumed rate of investment return and the highest tax rates applicable.
HMRC said it does not recognise the estimates to be accurate.
The report claimed that Ireland ranked high in the running of countries losing tax to offshore wealth, supposedly with over £10.4billion lost per year. This was closely followed by Germany (£7.9billion) and China (£7.9billion).
While total tax losses as a result of offshore wealth are lower in Ireland, RIFT analysis found the £10.4billion lost annually equates to 2.4 percent of the country’s GDP – which placed it in the proposed top 10.
However, it’s the Marshall Islands that were claimed to bear the worst economic brunt as a result of offshore tax dodging.
The report claimed that the Pacific island nation, located halfway between Australia and Hawaii, was estimated to lose around £56.8million a year in tax revenue, equating to 27 percent of its national GDP.
Samoa (17 percent), Luxembourg (12 percent), Curacao (11 percent), Seychelles (eight percent), Liberia (four percent), Belize (three percent), Cyprus (three percent) and St Vincent and Grenadines (three percent) were also claimed to rank high.
