People with undeclared offshore tax liabilities are being urged to come forward and pay what they owe or face prosecution, under new rules announced by the government today.
The new criminal offence of failing to declare taxable offshore income and gains is set out in an HM Revenue and Customs (HMRC) consultation paper launched today. The consultation seeks views on the design of the new offence and on what the appropriate safeguards should be.
The majority of offshore cases will continue to be dealt with through a civil approach. A further consultation paper sets out the government’s plans to introduce tougher civil sanctions for offshore evaders, including those who move their taxable assets between offshore banks in different countries in an attempt to hide their wealth and evade tax.
The consultation examines the situation where an individual moves their assets from one offshore centre which has tightened its tax-information-sharing laws to another which hasn’t. The 20-year rule limiting how far back HMRC can look at a taxpayer’s affairs could also be suspended.
David Gauke, Financial Secretary to the Treasury, said: “The minority who use offshore secrecy to evade UK tax are making a big mistake. There is nothing wrong with holding assets offshore but investors must pay the tax they owe here.
“Thanks to this government’s leadership, countries across the world have agreed to share information on offshore accounts.
“Over 56,000 people have already told HMRC about what they owe offshore and HMRC has offered opportunities to clear things up as quickly and easily as possible. Those that don’t come forward must face tough consequences, including a criminal conviction.”
The two consultation papers are entitled ‘Tackling offshore tax evasion: A new criminal offence’ and ‘Tackling offshore tax evasion: Strengthening civil deterrents’. They will be published on 19 August on the GOV.UK website on the HMRC consultations page. Both consultation periods end on 31 October 2014.