Government to introduce new criminal offence for tax evaders
14 Apr 2014 04:23 PM
New rules will make it easier to prosecute
offshore tax evaders.
The
government will consult on plans to introduce a new strict liability criminal
offence for individuals who hide their money offshore.
Under the plans announced by the Chancellor, HM Revenue
& Customs (HMRC) would no longer need to prove that individuals who have
undeclared income offshore intended to evade tax, in order for a criminal
conviction to be handed down.
At
present, HMRC has to demonstrate that even when someone failed to
declare offshore income, that the individual intended to evade tax. This change
will mean HMRC only has to demonstrate the income was taxable and
undeclared meaning it will be easier to secure successful prosecutions of
offshore tax evaders.
As
well as introducing the new criminal offence, the government will consult on a
range of options building on the existing penalties faced by those hiding their
money in offshore accounts – currently up to 200 percent of the tax owed
– to make sure they act as a clear and effective
deterrent.
The
consultation will look at whether the existing penalty limit should be raised
further, how penalties could be increased if individuals try to move money
around in a bid to avoid detection and extending the penalty regime to include
inheritance tax.
The
announcement comes as the government publishes an update to its offshore
evasion strategy, No Safe
Havens.
It
will also publicise that HMRC is ready and able to financially reward
whistleblowers for significant information that helps uncover offshore hidden
untaxed assets.
Chancellor of the Exchequer, George Osborne,
said:
The
government has taken significant steps to clamp down on those hiding their
money offshore. HMRC has brought in over £1.5billion over the
last two years and, through our leadership at the G8, we have taken significant
steps towards greater transparency and tax information
sharing.
But
there can be no let up and we will continue to pursue offshore tax evaders.
Those who continue to believe they can hide wealth offshore should know that
there is no safe haven and that serious consequences await
them.
The
UK put tax and transparency at the heart of its G8 Presidency. The government
has since signed automatic tax information sharing agreements with the Overseas Territories and Crown Dependencies to automatically share tax
information.
The
UK has also – along with the France, Spain, Italy and Germany – led
the way in pushing for a multi-lateral information sharing pilot. 44
jurisdictions have now signed up to this pilot and the timetable for
implementation was set out on 19 March 2014.
Draft legislation to implement the
new OECD standard in automatic tax information exchange will be
published in due course.