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Her Majesty's Revenue and Customs (HMRC) is paying a German crook a reward for allegedly stolen information about bank accounts in Liechtenstein. The information is believed to relate to 100 people who between them owe the UK tax authorities more than £100m.

The tiny princedom is much loved by tax dodgers for its refusal to sign up to international finance treaties - The Organisation for Economic Co-operation and Development named Liechtenstein as an "uncooperative tax haven" last year.

The Revenue has paid in the region of £100,000 for a set of discs with details of various Liechtenstein account holders. The Revenue has not confirmed who it paid, but it has been widely reported to be a whistleblower who used to work for a Liechtenstein bank.

But the deal has raised disquiet about the methods the Revenue is now prepared to use to catch suspected fraudsters.

One such concern would be that if any of the alleged evaders took their case to court HMRC would have trouble getting its dodgy dossier accepted as evidence by a British court. But lawyers seem to believe the Revenue is exempt from such considerations. The Inland Revenue is also protected from Data Protection laws when it is investigating fraud.

HMRC acting chairman Dave Hartnett said: "Most people under investigation have substantial amounts to pay with at least £100m tax at risk in the UK. HMRC is determined to protect the UK's tax base from evasion and in doing so we will use all the statutory powers we have. It should now be clear to everyone that there is no safe hiding place for the proceeds of tax evasion.

"Those who have hidden income and gains should make a prompt and complete disclosure to HMRC. And in the light of recent developments involving Liechtenstein bank accounts, there needs to be a significant move towards full implementation of OECD standards on transparency and effective exchange of information in tax matters."

It has been reported that the Revenue was offered the information two years ago, but turned it down.

German authorities paid more than £3m for similar information which led them to 750 German citizens with secret accounts in the principality.

It also emerged today that German intelligence is prepared to share the information with other nations. Finland, Norway, and Sweden are believed to have already expressed an interest. ®

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