HMRC warns offshore evaders on ‘tougher’ penalties from 2016
HM Revenue & Customs (HMRC) has warned people with offshore assets they will face ‘tougher’ penalties if they do not declare their full tax situation before the end of the year.
Currently, people with offshore assets can use disclosure facilities to prevent criminal proceedings being issued and to reduce their penalty.
From 2016 these disclosure facilities will be replaced by a ‘tougher’ facility with more severe penalties.
However, HMRC has not revealed what these ‘tougher’ penalties will be.
The government will close its four existing offshore disclosure facilities on 31 December.
This includes the Lichtenstein Disclosure Facility, which is available to anyone who owned an offshore asset on 1 September 2009 and who registered this asset in Lichtenstein before using the facility.
People who use the Lichtenstein Disclosure Facility receive an assurance there will be no criminal tax proceedings against them. They are charged a fixed penalty of 10% on tax liabilities up to 5 April 2009.
Since it was established in 2009 it has collected £1.7 billion in tax.
The government will also close down its crown dependency disclosure facilities in Guernsey, Jersey and the Isle of Man on 31 December 2015.
These are open to anyone who held an asset in the relevant territories between April 1999 and 31 December 2013.
The facilities will be closed before a new automatic exchange system giving details on individuals’ financial affairs is established with 90 countries in 2017.
David Gauke (pictured), financial secretary to the Treasury, said people who evade tax offshore would face tougher sanctions from next year.
‘Under our new regime the small minority who evade tax offshore, facilitate or turn a blind eye to offshore tax evasion will face tougher sanctions,’ he said.
‘With over 90 jurisdictions now agreeing to automatic exchanges of information, the net is closing in on offshore tax evaders.’