Tough new sanctions announced for offshore tax evaders
Tax evaders are set to face tough new sanctions under plans detailed by HM Revenue and Customs as outlined in a Press Release from HMRC.
The proposals will mean that those who do not come forward and pay outstanding taxes from offshore investments and accounts, could face even tougher penalties of up to three times the tax they try to evade, and increase their risk of potential criminal charges.
HMRC will be even better able to target evaders from October 2016, when it starts to receive an unprecedented amount of data on those with offshore accounts in the Crown Dependencies and Overseas Territories – one year ahead of even more data coming in from across the globe, when the Common Reporting Standard comes into force.
HMRC has published a package of civil and criminal options to tackle offshore tax evaders and the enablers of offshore tax evasion. The consultations include:
- A new criminal offence for offshore evasion – so in the worst cases it’s no longer possible to plead ignorance in an attempt to avoid criminal prosecution
- A new criminal offence for corporates who fail to prevent tax evasion or the facilitation of tax evasion on their watch
- Increasing the financial penalties faced by evaders – including, for the first time, linking a penalty to the value of the asset hidden offshore
- New civil penalties on those who facilitate evasion so they will face the same penalty as the tax evader
- Publicly naming both evaders and those who enable evasion.
The HMRC message is simple – come to us pay the tax and penalties that are due, before we target you with the introduction of even tougher sanctions and game-changing data.
The Financial Secretary to the Treasury, Jane Ellison explained from October HMRC will start to receive data on the offshore finances of UK taxpayers. This is a game-changer in the fight against evasion and it’s time for anyone who is evading tax to do the right thing and pay what they owe.
Director General of Enforcement and Compliance for HMRC, Jennie Granger outlined how HMRC is getting tougher on tax evasion. She said: “We will find those who think they can dodge paying tax in this country. We’ve closed old disclosure facilities, increased penalties, and ramped up our powers to tackle evaders and those that help others evade – the days of any safe havens for tax evaders are numbered.”
Alongside these changes, HMRC will open its Worldwide Disclosure Facility (WDF) from 5 September 2016. The WDF, announced at Budget 2015, allows those with outstanding tax to pay to put their affairs in order and will offer no special terms. HMRC will release further details when it opens.
HMRC has been clear that that not paying tax by failing to disclose your offshore income and investments is illegal. In 2014-15 HMRC brought in £26.6 billion from tackling tax evasion and avoidance, and since 2010 has raised more than £2.5 billion from offshore evasion initiatives.
Askews Accountants can advise you on various commercial and legal issues surrounding this announcement and other tax law changes. The implications of any decision need to be carefully considered so if you think your tax returns may land you in hot water it maybe the time to not contact us. We can discuss your situation and to better understand which options are best for you in complete confidence.
Contact Neil for more details. Click Here