New penalties for undeclared #offshore accounts. People who hide funds in offshore accounts could face penalties for undeclared tax at 200 per cent of the amount owed, HM Revenue and Customs (HMRC) has announced.
As from 6 April 2011, penalties for offshore non-compliance on income tax and capital gains tax will be linked to the tax transparency of the country involved.
The penalties could climb to as high as 200 per cent and will apply to both businesses and individuals who under-declare income and gains from territories which do not automatically share tax information with the UK.
David Gauke, 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 £900 million 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 classify territories into three groups, which determine what level of penalty will apply for non-compliance.
The first self-assessment returns to which the penalties would apply are those concerning the 2011/12 tax year (to be filed by January 2013).