HMRC propose new criminal offence of offshore tax evasion

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People with undeclared offshore tax liabilities are being urged to come forward and pay what they owe or face prosecution, under new rules announced by the government in the UK.
People with undeclared offshore tax liabilities are being urged to come forward and pay what they owe or face prosecution, under new rules announced by the government in the UK.

The newly proposed criminal offence of failing to declare taxable offshore income and gains is set out in an HMRC consultation paper. The majority of cases will continue to be dealt with through a civil approach. A second consultation paper sets out the government’s plans to introduce tougher civil sanctions for offshore evaders, including those who move their taxable assets between offshore banks in different countries in an attempt to hide their wealth and evade tax.

The Financial Secretary to the Treasury, David Gauke, states “The minority who use offshore secrecy to evade UK tax are making a big mistake. There is nothing wrong with holding assets offshore but investors must pay the tax they owe in the UK.

“Thanks to the government’s leadership, countries across the world have agreed to share information on offshore accounts. Over 56,000 people have already told HMRC about what they owe offshore but those that don’t come forward must face tough consequences, including a criminal conviction.”

The two papers titled ‘Tackling offshore tax evasion: A new criminal offence’ and ‘Tackling offshore tax evasion: Strengthening civil deterrents’. The consultation periods for both papers end on the 31st of October 2014.