Even if the new criminal offences rolled out by HM Revenue & Customs were extended to include past events, “nothing has been disclosed so far which suggests they would criminalise what has happened”, Corker Binnings’ Andrew Smith said.
In the second Finance Bill of 2017, the government outlined penalties for enablers of abusive tax arrangements.
“If Appleby’s advice has gone no further than tax avoidance, we shouldn’t expect to see any prosecutions in the UK arising from this data leak.”
He added that advisers will have to tread extremely carefully to avoid falling “onto the wrong side of the notoriously blurred line between legitimate tax avoidance and illegitimate tax evasion”.
Stupidity on a grand scale
Miles Dean, managing partner at Milestone International Tax, agrees. “It would be very surprising if the affairs of those individuals concerned were illegal or nefarious. It is the theft of the papers [from Appleby] this is illegal.”
He continued: “Just because an individual makes an investment that is based offshore does not mean that they have done anything wrong – if they fail to disclose it (and the return they make) on their tax return then that’s tax evasion.
“But to make the quantum leap and suggest that everyone from the Queen to Bono is dodging tax because some of their investments are made via Bermuda, Cayman or Malta is stupidity on a grand scale.”
Dean added that some of the documents relate to matters 75 years ago “when the world was a very different place”.
“Recent developments have made a significant impact on the use of tax havens, namely the common reporting standard (CRS) and Fatca. Both Fatca and CRS are automatic exchange of information protocols that mean privacy is no longer what it used to be.”
Hypocrisy
“Tax ought not to be a matter of public debate,” said Mark Davies, managing director of Mark Davies & Associates. “I think, in short, that inflammatory headlines about tax avoidance is not a good thing.
“There is a lot of hypocrisy about this – tax avoidance, taking legal steps to pay less than you otherwise would if you hadn’t, is supposed to be legal. Everybody does this – every time you make the decision to pay into a pension, be self-employed rather than employed, sell something to make a capital gain rather than pay income tax on future income.
“But when wealthy people do it and complex affairs generally means complex arrangement, then there is an absurd moral argument that they ought to pay more tax because they can afford to.”
Davies concluded by calling on the government to create a simpler form of taxation, with lower rates across the different taxes.
