Government plans to get tough on offshore assets in new tax crackdown

The government is to consult on plans to introduce a new strict liability criminal offence for individuals with undisclosed assets abroad, in a move that could trigger tax investigations with potentially serious consequences.

Under plans announced on 14 April, HM Revenue & Customs (HMRC) would no longer need to prove that individuals with undeclared income offshore intended to evade tax in order for a criminal conviction to be handed down.

If the proposals are introduced, HMRC would only have to demonstrate the income was taxable and undeclared, which the government says will make it easier to secure successful prosecutions.

The government will also consult on a range of options building on the existing penalties faced by those hiding their money in offshore accounts, currently up to 200 per cent of the tax owed.

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 came as the government published an update to its offshore evasion strategy, No Safe Havens. It is also highlighting that HMRC is ready to financially reward whistleblowers for significant information that helps uncover offshore hidden untaxed assets.

Chancellor of the Exchequer, George Osborne, said: “Those who continue to believe they can hide wealth offshore should know that there is no safe haven and that serious consequences await them.

With the government and HMRC intent on closing the UK tax gap – the difference between tax owed and tax collected – the range of tax crackdowns and tax investigations continues to grow. In the event of a tax investigation, working with the experts at Taxation-Investigation can help to clarify the taxpayer’s position and identify their options.

We’ll provide constructive advice and support, enabling taxpayers to focus on their day-to-day affairs while we liaise with HMRC inspectors to bring the investigation to a satisfactory conclusion. Where tax affairs are in order, we will argue the case robustly and we will also negotiate any settlement necessary with a view to minimising HMRC claims for any tax and penalties.