UK committed to ending offshore tax evasion for good, minister confirms

Written by Ray Clancy

Tuesday, 19 January 2010 09:57

The UK government is to bring in new measures in 2010 to close down offshore tax evasion for good.

Treasury Minister Stephen Timms has issued a new warning that offshore tax evasion is ‘morally unacceptable’ as UK authorities investigate accounts with over 300 global banks.
Timms said that he is disappointed that only 10,000 people have came forward to HM Revenue and Customs to notify their intention to disclose previously undeclared offshore income and gains by the amnesty deadline earlier this month.

HMRC is now investigating hundreds of cases of those who should have come forward but have chosen not to.

‘Hiding money in offshore accounts to evade tax is economically and morally unacceptable. It robs public services of funding and places an unfair burden on the honest majority of taxpayers,’ said Timms.

‘Some people will still be tempted, and that is why the Government will bring forward measures during 2010 to build on the significant progress made both in the UK and globally during 2009 in closing down offshore tax evasion for good,’ he added.

Dave Hartnett, HMRC’s Permanent Secretary for Tax, said those who have failed to come forward face penalties of up to 100% of the tax not paid. ‘But it’s very important to remember that, when someone comes forward voluntarily, the penalty is always lower than when we catch the evader. This means it’s still well worth contacting HMRC if you have undisclosed offshore accounts,’ he explained.

The inquiries go beyond individual account holders, he added. ‘We are also examining information about offshore accounts in order to help us identify intermediaries who have assisted UK residents in hiding money offshore.’

Meanwhile Liechtenstein, a former favourite haven for tax avoiders has its own amnesty. The Liechtenstein Disclosure Facility runs until the end of March 2015. Individuals who are liable to UK tax on assets in Liechtenstein should disclose those assets and the arising income in order to meet their legal obligations to the UK, a spokesman said.

The government of Liechtenstein has also put in place a Taxpayer Assistance Compliance Programme which requires action by financial services providers in Liechtenstein to identify UK clients and confirm that they are meeting their UK tax responsibilities. Those who fail to demonstrate they are disclosing to HMRC will have their accounts closed.