Speaking in today’s budget, Darling said HM Revenue & Customs would be able to penalise deliberate and concealed tax evasion with charges of up to 200% of the tax due.
He said the tougher penalties would target non-compliant investors who use less transparent jurisdictions in order to conceal gains as it is more difficult for HMRC to check an offshore tax position where there is limited or no scope to exchange information.
In addition to tougher penalties, the Chancellor announced a number of other measures to tackle tax evasion including enhancements to strengthen the disclosure regime. Darling said these measures would raise £1.5bn in additional yield and will protect a further £4bn of tax receipts by 2012-13.
Neil Chadwick, technical marketing manager at Royal London 360°, said: “The UK Government has been trying to get UK residents with undeclared income to ‘fess up’ for years now in a number of tax amnesties.
“However, as I understand it, the latest amnesty did not prove to be all that successful, despite it being extended. For some UK residents, the benefits of not paying any tax on foreign accounts has outweighed risks and costs of getting caught. However, with the penalties being increased, that may no longer be the case.”