HMRC has unveiled plans to tackle offshore tax evaders with tough new sanctions.
Those who fail to pay outstanding taxes from offshore investments and accountants would face harsher penalties of up to three times the tax they have tried to evade as well as an increased risk of potential criminal charges. From October, in the run-up to the Common Reporting Standards coming into force in 2017, HMRC will receive more information on people with offshore accounts in the Crown Dependencies and Overseas Territories.
Jennie Granger, director general of enforcement and compliance for HMRC, says: “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.
“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.”
However, barrister Tom Wesel, partner at international tax consultancy firm Milestone, says: “HMRC already has a very severe penalty regime for offshore evasion, which is further strengthened in the current Finance Bill.
“The new proposals look like overkill. There is no requirement for fault or any intent to evade tax. So entirely innocent errors would be caught. If tax authorities cross the line from taxation by consent to bullying tactics, they risk losing the trust and cooperation that is essential for collecting tax.
“Perhaps HMRC regard those with assets offshore as fair game. But this is a dangerous game for the state to play.”
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