A TAX information exchange agreement between Guernsey and HM Revenue & Customs has given significant power to the UK taxman, a leading UK tax litigator has warned.

Chief Minister Lyndon Trott (pictured) signed off a package of measures with the UK authorities just over two weeks ago, stating it could net Guernsey an extra £3m. a year in the tax collections.

However, Andrew Watt, managing director of tax disputes and investigations at Alvarez & Marsal Taxand in London, said Guernsey’s 10th TIEA was of major significance to the UK as well because of the amount of commercial traffic between the two.

He said its ratification could lead to exchange requests being submitted on a weekly, if not daily, basis.

‘This is a tremendous tool for HM Revenue and Customs. The agreement goes way beyond the present powers.’

He said HMRC was becoming more aggressive in its pursuit of tax evaders and rejected suggestions that TIEAs were token gestures designed to prevent in-depth tax authority investigations.