HMRC: Increase in Requests for Tax Evasion Assistance
There has been a significant increase in requests to the HMRC for assistance in taxpayer investigations from foreign governments. Specifically, there was a 24% rise in 2016 requests since 2015 due to the authorities’ attempts to prevent tax evasion.
As governments tackle the issue of ensuring that large corporations and high net-worth individuals pay the correct amount of tax, the increased number of requests is a result of this alongside the international crackdown on alleged tax evasion and avoidance.
The respective appeals were created under ‘direct tax instruments’, which permit various jurisdictions to exchange details on tax affairs of businesses and individuals operating cross-border. This includes OECD information sharing agreements, bilateral double taxation agreements and bilateral tax information exchange agreements.
The so-called ‘Panama Papers’ leak in April 2016 increased public pressure on HMRC to persist those suspected of hiding assets and income offshore.
Moreover, severe new penalties will be introduced as of the 30th of September 2018 for those who have not completed their UK tax returns correctly according to ‘offshore tax matters’. The new penalty will begin at 200% of the tax liability, however it can be lowered to a minimum of 100% of the tax liability.
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