60-second interview: Sean Wakeman

Your research found that most accountants think HMRC needs to launch a general disclosure mechanism.

Nothing much surprised me; if anything it confirmed our thoughts. If there were any surprises they came in the unanimity.
To get 96 per cent of accountants saying they think the time for a general tax amnesty is right now is an overwhelming result. I was a little surprised by how strong the feeling was.

In last year’s survey, 78 per cent were in favour. Why the increase?

There has been a growing feeling among accountants that the facilities that have been wheeled out are perceived to be favourable to the most sophisticated investor. That doesn’t always mean wealthier... I think accountants recognise that these facilities will only affect a small minority of their clients.

The survey findings also raised concerns about communication.

The major criticism of HMRC regarding its disclosure facilities is how under-publicised they have been. What HMRC is relying on is getting the message out to accountants, which in turn gets the message out to private clients.

But actually if you are successfully getting the message to accountants and they don’t feel confident to tell their clients, the message does not get from A to B to C.

Advisers like me have said for a long time now that if you really want to maximise the yield and success of a particular disclosure facility, you need to invest in advertising in a clever way that doesn’t have to be about taking out spreads in a broadsheet. You can do it by creating a revenue champion, a figurehead, to attract press interest and spread the word.

HMRC is cost conscious, but it has to recognise that for any facility to work it has to get the message out there to individual taxpayers and can’t just rely on accountants, IFAs or other intermediaries.

Going hand in hand, you’ve got the political aspect, which to me has held back the international amnesties. The government and HMRC cannot ostensibly be seen to be letting tax cheats ‘off the hook’ as it’s a very political issue.

Is this short-term firefighting?

The taskforces have been successful to a degree, but I think everybody in my field knows that the Revenue is simply not resourced to take on every trade in the country. It is a short-term strategy and the reason for doing it is to scare people.

If HMRC is going to do something about domestic tax evasion, do something that is properly thought out in a structured manner. So if you’re going to do a domestic amnesty, give it a long shelf life, give it time to get the word out to people and for action to be taken.

The facilities with Liechtenstein (LDF), the Isle of Man, Jersey and Guernsey all run to 2016. It seems sensible to me if you’re going to launch a general tax amnesty to do it to 2016.

But hand in hand with that you have the need to make it quite clear that this is going to be the final opportunity for tax evaders to come clean.

The other thing that came out of this survey is that you cannot do a general tax amnesty seriously without putting in immunity from prosecution. We have it with the LDF, why can’t we have it for a domestic facility? It’s discriminatory.

How does this affect the next generation and succession planning?

We have dealt with situations where a parent has created a trust or a structure and they have monies in a bank account and then they die. The children have been left with that problem with the bank account, trust structure or foundation, which they’ve had to regularise themselves.

If you are a younger person and you are trying to understand the logic of welcoming non-taxpayers back into the fold then you have to be fairly open-minded and say any increase in revenues to the Exchequer means increased revenues available for hospitals, schools and roads and potentially lower taxes for everybody.

How do you educate people?

I believe that if you tell the public how much can be raised from an amnesty and, on the other hand, the huge cost of prosecutions for tax evasion, they will be able to see that, except for in obvious cases of heinous behaviour or when huge sums of money are involved, the cost of prosecuting one person outweighs the amount of money you could probably get from 50 disclosures.

Because of “limited resources”, will the onus on advisers to deliver these messages continue?

Yes, I believe so. HMRC is not resourced to spend a lot of money on advertising and promotion.

However, one positive thing that came out of the survey was that two-thirds of the accountants who were surveyed would tell all their clients about a general tax amnesty. That contrasts incredibly with the 7 per cent who have told all their clients of the international facilities.

Accountants also raised the point of feeling uncomfortable and not having time.

The uncomfortable thing is understandable. It is quite a difficult message. Having spoken to many accountants, IFAs and general advisers about this, the only way they have felt it appropriate to tackle these issues so far has been some sort of generic letter to all their clients: “Just to keep in the loop, I’m writing to all of my clients, I know this won’t affect many of you...”

It’s a very general message. You can’t put something like this to a client unless you have some knowledge of that person’s situation. My instinct is that many clients would take offence.

Sean is head of the tax investigations team at Crowe Clark Whitehill

Jennifer Palmer-Violet is acting editor of Private Client Adviser