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HMRC announces harsher penalties for offshore tax evaders
HMRC has announced a steep rise in its penalties for offshore tax dodgers.
HMRC has increased its penalties for those who hide money in offshore tax havens Photo: JoeFox / Alamy
By Leah Hyslop5:59PM GMT 01 Feb 20113 Comments
From 6 April 2011, the penalties for keeping undeclared money in offshore financial centres will increase, with higher penalties levied on those who keep their money in countries which do not automatically share tax information with the UK.
All offshore jurisdictions are currently divided into three categories, with category one representing the countries which are most tax transparent, and category three representing the least transparent.
Under the new rules, taxpayers who fail to declare tax in category one countries will pay the same penalty as under existing legislation, but people with with money in category two and category three jurisdictions will see their penalties increased by 1.5 times and two times respectively.
In a statement, Dave Hartnett, permanent secretary for tax said: "These new penalties will increase the deterrent against offshore non-compliance. They build on other activity, including signing tax information exchange agreements, requiring information about offshore bank accounts and disclosure opportunities, including the Liechtenstein Disclosure Facility (LDF)."
The penalties will apply to all individuals who failure to notify HMRC that they are liable to tax, who are inaccurate on tax return forms, and who fail to file return forms on time.
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HMRC disclosed that the penalties could in some circumstances be reduced, but that greatest leniency would be shown to those who made "unprompted disclosures" to HMRC, or who co-operated fully with HMRC in trying to establish the correct amount of tax due.
Last year, HMRC was given an extra £900 million by the Treasury to try and clamp down on tax evasion and avoidance. It predicts that its renewed efforts will bring in an extra £7 billion a year in tax by 2014/15.
David Gauke, financial secretary to the Treasury, said: “The game is up for those going offshore to evade tax. With the risk of a penalty worth up to 200 per cent of the tax evaded, they have a great incentive to get their tax affairs in order.”
HMRC has announced a steep rise in its penalties for offshore tax dodgers.
By Leah Hyslop5:59PM GMT 01 Feb 20113 Comments
From 6 April 2011, the penalties for keeping undeclared money in offshore financial centres will increase, with higher penalties levied on those who keep their money in countries which do not automatically share tax information with the UK.
All offshore jurisdictions are currently divided into three categories, with category one representing the countries which are most tax transparent, and category three representing the least transparent.
Under the new rules, taxpayers who fail to declare tax in category one countries will pay the same penalty as under existing legislation, but people with with money in category two and category three jurisdictions will see their penalties increased by 1.5 times and two times respectively.
In a statement, Dave Hartnett, permanent secretary for tax said: "These new penalties will increase the deterrent against offshore non-compliance. They build on other activity, including signing tax information exchange agreements, requiring information about offshore bank accounts and disclosure opportunities, including the Liechtenstein Disclosure Facility (LDF)."
The penalties will apply to all individuals who failure to notify HMRC that they are liable to tax, who are inaccurate on tax return forms, and who fail to file return forms on time.
Related Articles
HMRC disclosed that the penalties could in some circumstances be reduced, but that greatest leniency would be shown to those who made "unprompted disclosures" to HMRC, or who co-operated fully with HMRC in trying to establish the correct amount of tax due.
Last year, HMRC was given an extra £900 million by the Treasury to try and clamp down on tax evasion and avoidance. It predicts that its renewed efforts will bring in an extra £7 billion a year in tax by 2014/15.
David Gauke, financial secretary to the Treasury, said: “The game is up for those going offshore to evade tax. With the risk of a penalty worth up to 200 per cent of the tax evaded, they have a great incentive to get their tax affairs in order.”
