Darling Introduces 200 per cent Penalties for Offshore Tax Evasion

And Tax Information Exchange agreements with Belize, Grenada and Dominica

The consultation document on 'Tackling Offshore Tax Evasion' was published at the PBR in December 2009. Today’s (24 March) Budget as expected, implemented some of these measures. Stuart Lisle, Tax Partner at BDO LLP in Southampton said: “The data received from five retail banks in the UK showed HMRC that only 25 per cent of individuals declared income from offshore accounts on their tax returns. This information is cited as one of the main reasons for pushing through further tough laws to stop tax evaders. That, and the desperate need to raise tax revenues!” Stuart Lisle continued: “HMRC is taking a two pronged approach of huge penalties of up to 200 per cent for those caught using offshore accounts to evade taxes, and increased information exchange. The new information exchange agreements signed by the Government are focused on offshore accounts held in countries where HMRC believe UK residents are hiding money. “All UK banks are in the process of providing a vast quantity of information to HMRC regarding offshore bank accounts held by UK residents. We expect them to use this data to open investigations for many years to come, unless people come forward voluntarily. HMRC is encouraging voluntary disclosures by launching special initiatives such as The Liechtenstein Disclosure Facility (estimated in today’s announcement to bring in £940 million). “This is part of a series of new rules aimed at making tax evasion unacceptable and financially prohibitive. “Many of the measures for dealing with offshore accounts are similar to laws introduced in America. President Obama signed new far reaching legislation only last week to increase the reporting on foreign financial centres (signed on 18 March 2010).” - Ends –

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