200% tax evasion penalties loom
HMRC could hit offshore tax evaders with 200% tax penalties
TAX EVADERS could face 200% penalties under new tax rules.
The penalties for offshore non-compliance based on the tax transparency of the country involved will be introduced on 6 April, HM Revenue & Customs has said.
The penalties, which were announced in the Finance Act, could rise to up to 200% for individuals and companies who under-declare income and gains from category three territories – those that do not exchange information with the UK. Penalties of 150% will apply to income generated in category two countries, which have limited information sharing with the UK.
Dave Hartnett, the HMRC permanent secretary for tax, said: “These new penalties will increase the deterrent against offshore non-compliance. They build on other activity, including signing tax information exchange agreements, requiring information about offshore bank accounts and disclosure opportunities, including the Liechtenstein Disclosure Facility (LDF).”
Gary Ashford, the chair of the Management of Taxes Committee for the CIoT and head of tax investigations with RSM Tenon, told Accountancy Age that the new measures will be “targeting carelessness as well as tax evasion“.
He added: “It will undoubtedly apply an extra level of pressure on countries to become category one. I would expect HMRC to target people that do business in category two and category three countries.”