Those who do not come forward and pay outstanding taxes from offshore investments and accounts could face even tougher penalties under new HM Revenue & Customs proposals.
Published in a consultation today (24 August), the plans mean these people could face of up to three times the tax they try to evade, whilst increasing their risk of potential criminal charges.
From October, HMRC will start to receive more data on those with offshore accounts in the Crown Dependencies and Overseas Territories.
Then in 2017, even more data will come in from around the globe when the Common Reporting Standard comes into force.
Jane Ellison, financial secretary to the Treasury, called this additional data “a game-changer” in the fight against evasion.
“Every penny of tax that people evade deprives our public services of essential funding and we are focused on collecting all tax that is due,” she added.
In advance of this new information coming into the hands of the taxman, HMRC is proposing a new rule called the ‘requirement to correct’.
This will mean any person with UK tax irregularities related to offshore interests must come forward and correct those liabilities by 30 September 2018.
After this date, any person who is found to have failed to have corrected their affairs will be subject to a new set of sanctions.
The requirement to correct will apply to any taxpayers who have a UK tax loss relating to particular taxes and the use of territories outside the UK to generate or shelter those tax losses.
It will apply to behaviour such as moving latent gains - or UK income or assets - offshore to conceal them from HMRC, not declaring taxable income or gains that arise overseas, or taxable assets kept overseas and using complex offshore structures to hide the beneficial ownership of assets, income or gains.
Jennie Granger, director general of enforcement and compliance for HMRC, said they have closed old disclosure facilities, increased penalties and ramped up powers to tackle evaders and those that help others evade.
“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.”
In the wake of the Panama Papers leak in early April, the government created a taskforce lead by HM Revenue & Customs and the National Crime Agency, to investigate allegations of offshore tax avoidance, with £10m allocated to support it.
