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UK has more than £854bn in offshore wealth, with 0.92 per cent lost from GDP

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Transitioning HMRC to a digital system is now expected to cost as much as £1.3bn - and has gone four times over budget, MPs have warned.
Transitioning HMRC to a digital system is now expected to cost as much as £1.3bn - and has gone four times over budget, MPs have warned.

UK citizens own more than £854bn in offshore wealth, ranking it fifth in Europe when measured as a percentage of lost GDP.

Britain lost an estimated £19.2bn in tax because of the problem according to new research by anti money laundering group Credas Technologies, with the overall figure representing almost one per cent of national income.

The tiny state of Luxembourg took top spot, with 14 per cent of its revenue lost offshore, missing out on almost £8bn a year in tax and holding almost £340bn overseas. 

Ireland sits closely behind, losing nearly £430bn a year, representing a 3.22 per cent loss in relation to national income, while other countries dogged by the problem included island nations Malta and Cyprus, with 2.71 per cent and  4.55 per cent respectively.

Romania had the lowest level of lost tax revenue, at £8.8m, equating to just 0.005 per cent of its GDP.

Reflecting on the data, chief executive of Credas Technologies, Tim Barnett, said Russia’s war against Ukraine has brought “the illicit activities of some super wealthy individuals and entities within the UK” into sharp focus.

But “it’s fair to say that this is certainly a two way street and the tax lost to offshore wealth of UK citizens alone is quite staggering. 

“That’s not to say that all offshore wealth is illegal but the financial secrecy it provides is often the defining feature that enables, and encourages, non-residents to hide their assets and even their identity while laundering money and abusing their tax responsibilities.”