Some offshore tax evasion penalties to double
ANYONE hiding money offshore – Huntingdonshire folk are above that sort of thing, of course – could face new penalties of up to 200 per cent, HM Revenue & Customs (HMRC) has warned.
From April 6, 2011 penalties for offshore non-compliance for income tax and capital gains tax will be linked to the tax transparency of the country involved. There will be increased penalties in place for under-declared income and gains from territories which do not automatically share tax information with the UK.
David Gauke, Exchequer 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.
“We have given HMRC an extra �900m to tackle tax cheats because we are prepared to act against the minority who refuse to pay what they owe.”
Dave Hartnett, permanent secretary for tax at HMRC, added: “We are serious about tackling offshore evasion. Hiding tax liabilities offshore believing that you will never be discovered is no longer a realistic hope.
“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 new penalties for income tax and capital gains tax non-compliance classify territories into three groups, which determine what level of penalty will apply for non-compliance.
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For territories with automatic exchange of information on savings with the UK t The penalty will be the same as now - up to 100 per cent. For t Territories which exchange information on request with the UK and the least-developed countries without information-sharing agreements with the UK the penalty will be 1.5 times that due under existing rules - up to 150 per cent. But for territories that do not exchange information with the UK the fine will be double that due under the existing rules - up to 200 per cent.
The first self-assessment returns to which the penalties would apply are those concerning the 2011/12 tax year (filed by January 2013).
INFORMATION: on increased penalties for offshore non-compliance is at http://www.hmrc.gov.uk/news/offshore-penalties.htm, and the designation of territories can be found at http://www.hmrc.gov.uk/news/territories-category.htm