On Tuesday, the UK taxman advised that anyone with overseas assets needs to put their cards on the table or risk much bigger fines.
“As is always the case”, HMRC said it “will prosecute the most serious cases of tax evasion”.
The tougher penalties, which could see evaders hit with 200% fines, will take effect from 1 October 2018 and are part of a drive by the government to ensure there are no safe havens for taxpayers that seek to evade paying what they owe.
A consultation document on how the UK should legislate to extend the time limits to assess tax in cases involving offshore income, gains or chargeable transfers will close on 14 May 2018.
The limit would triple from four to 12 years under the proposals.
International transparency
The taxman warned that it already holds a vast amount of data on offshore assets, which is “growing all the time”.
The introduction of the Common Reporting Standard (CRS) gives tax authorities across the globe access to a trove of information of where their citizens have assets.
The director general for customer strategy and tax design at HMRC, David Richardson, said: “Everyone has to pay their tax, and the vast majority of people and businesses already do. It’s on their behalf that we’re cracking down on offshore tax cheats.”
Awareness
The UK Government said it recognises that some people may not realise that they must declare their overseas income; if, for example, they have worked overseas or are receiving income from a rental property outside the UK.
In particular, HMRC highlighted financial advice due to the changing nature of laws and specific circumstances, meaning past advice may no longer be valid.
The taxman said it has “unfortunately seen taxpayers who’ve sought guidance in good faith, get caught out because the advice has become out of date”.
“It’s important to check your tax affairs regularly.”
Tick tock
HMRC warned that “the majority of taxpayers with offshore assets already disclose them in line with UK law, so have nothing to worry about”.
“But time is running out for the minority of tax dodgers,” it warned.
