UK Proposes New Clampdown On Tax Evaders

Amisha Mehta Deputy Editor London 25 August 2016

UK Proposes New Clampdown On Tax Evaders

People evading UK taxes by keeping money offshore could face penalties of up to 300 per cent of the evaded tax, the country's tax authority says.

HM Revenue and Customs plans to introduce tougher penalties for those who do not come forward and pay outstanding taxes from offshore investments and accounts.

Under the proposals, people who fail to disclose their offshore income and investments will face penalties of up to three times the tax they try to evade, as well as the risk of potential criminal charges.

HMRC said it will be 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.

“We are determinedly tackling this. 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,” said Jennie Granger, director general of enforcement and compliance for HMRC.

“Our 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.”

As announced last year, HMRC will open its Worldwide Disclosure Facility from 5 September 2016. The WDF will allow those with outstanding tax to pay to put their affairs in order.

“Voluntary disclosure is usually a double win for the exchequer in terms of both back taxes, and future taxes which will then flow from income, gains and inheritance; so despite the critics these processes can be valuable to the economy,” Dawn Register, partner, BDO tax dispute resolution, said about the launch of the WDF.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes