Offshore savings Updated:
HM Revenue & Customs (HMRC) has warned offshore tax evaders that they could face fines of up to 200% when the next tax year begins on 6 April.
From that date, fines dished out to tax evaders will be linked to the tax transparency of the country involved.
It means there will be increased penalties in place for under-declared income from places that do not automatically share tax information in the UK.
The penalty for tax avoidance in locations that share such information with this country will remain at 100% of the tax avoided.
However, investors with money stowed away in territories that only share data with the UK on request or lesser developed countries that do not have information-sharing agreements will face a fine of 150%.
The biggest fines that the HMRC can dish out will be 200% of tax avoided – a sum that could potentially run into tens of thousands of pounds.
This heavy deterrent will be reserved for tax avoidance in countries which do not exchange information with the UK or whose existing agreements do not meet international standards of exchange of information.
"Time is running out for anyone going offshore to evade tax. Get your tax affairs in order or face the risk of a penalty worth up to 200% of the tax evaded," David Gauke, Exchequer Secretary to the Treasury, said.
The HMRC has increased the pressure on tax evaders that hide their funds offshore in recent years.
The Offshore Disclosure Facility (ODF) - the first such offshore disclosure opportunity - ran from April to November 2007. It generated over £450 million in tax, interest and penalties - with more from follow-up investigations.
The success of the ODF was built on by the New Disclosure Opportunity (NDO), which ran from 1 September 2009 until 12 March 2010.
"We have made significant progress tackling international tax evasion and closing in on tax havens in recent years," Dave Hartnett, Permanent Secretary for Tax at HMRC, said
"This is the next step in increasing the deterrent against offshore non-compliance - and those who decide to take the risk will feel the full force of HMRC's new penalties."
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