HM Revenue and Customs (HMRC) is stepping up its crackdown on offshore tax evaders by consulting on five new sanctions unveiled by financial secretary to the Treasury, David Gauke this week.
The moves to toughen the Conservative government’s approach to tax evasion overseas follow on from the March Budget 2015 where two offshore facilities were forced shut – the Liechtenstein Disclosure Facility and the Crown Dependency Disclosure Facilities.
According to the tax authority, the closure of those two facilities recouped a further £1.6 billion into the Treasury coffers that would have otherwise gone undetected.
“Time’s up for people who don’t pay their fair share of tax by hiding their money offshore,” said Gauke.
“People who evade tax, facilitate or turn a blind eye to tax evasion will now face powerful criminal and civil sanctions under our tough new regime.
“We’ve already seen over 90 countries across the world sign up to automatically exchange information on taxpayers.
“This, together with our new sanctions, will mean there is nowhere left to hide for offshore tax evaders.”
The latest proposals include criminal and civil sanctions:
- A new criminal offence for offshore evasion where, in the worst cases, it is no longer possible to plead ignorance in a bid to avoid criminal charges.
- A new criminal offence for corporates who fail to prevent tax evasion or the facilitation of tax evasion on their watch.
- An increase to financial penalties dished out to offshore tax evaders, including, for the first time, linking a penalty to the value of the asset(s) hidden overseas.
- New civil penalties to penalise those who facilitate evasion schemes, ensuring they receive the same penalties as the tax evaders themselves.
- A public naming and shaming of tax evaders and those who facilitate offshore tax evasion.
The Conservatives aim to collect an additional £5 billion a year from this more stringent approach to tax evasion by 2019-20.
During Chancellor, George Osborne’s Summer Budget 2015 he confirmed he would be handing HMRC an additional £750 million war chest to help fight tax avoidance.