Tackling offshore tax evasion
The Government has been targeting offshore tax avoidance and evasion and there have been a number of recent disclosure opportunities that offered taxpayers the opportunity to come forward and make a disclosure, with beneficial terms. In general, making a voluntary disclosure can result in significantly lower penalties than would otherwise be the case.
Taxpayers that continue to evade tax by moving their money and assets offshore are to be subject to new rules. The Government has announced its intention to introduce a strict liability charge, or criminal offence for failing to declare taxable offshore income and gains. A strict liability offence is a criminal offence where it is not necessary for the court to ascertain the state of mind of the defendant before convicting. A new consultation has been published seeking views on the proposed changes. The consultation is open for comment until the end of October.
Over the last two years, over £1.5 billion has been recovered from offshore tax evaders but there are still many taxpayers that have not come forward. The Government is clear that those who do not come forward in this new era of transparency must face tough consequences, one of which should be the prospect of a criminal conviction.
In the foreword to the consultation, David Gauke, Financial Secretary to the Treasury writes,‘Our message to taxpayers is clear: if you are hiding undeclared income offshore, HMRC is closing in on you. So come forward now before they come to you.’