THE GOVERNMENT is to develop and pilot a information exchange with France, Germany, Italy and Spain as the countries look to close the net on tax evaders.
Under the agreement, financial information will be automatically exchanged between the five countries in order to help catch and deter tax evaders as well as provide a template for a wider multilateral automatic tax information exchange.
The scheme will be based upon the Foreign Account Tax Compliance Act (FATCA) agreements which exist between the US and the countries, which also formed the basis of subsequent agreements struck by the UK.
Jersey became the most recent jurisdiction to strike such a deal with the UK, closely following Guernsey and the Isle of Man. Under those deals, UK residents with assets concealed on the islands will have until September 2016 to disclose details to the taxman and pay any tax owed to the HMRC, as well as a fine between 10% and 20% of the amount owed.
While in most cases, the deal will see evaders escape prosecution, HMRC is offering no guarantees.
Unlike a similar deal with Switzerland, anonymity is not enshrined, while the deals will not have the immunity from criminal prosecution seen in the Liechtenstein Disclosure Facility. The UK received its first payment from Switzerland, amounting to £340m in January.
In a letter to EU tax commissioner Algirdas Šemeta, the five finance ministers said the pilot “will not only help in catching and deterring tax evaders but it will also provide a template as to the wider multilateral agreement we hope to see in due course”.
The Treasury estimates evasion accounts for around £4bn in lost revenues every year, while the prime minister has put the issue high on the G8’s agenda during the UK’s presidency.
Exchequer secretary David Gauke described the accord as “an important further step in the fight against tax evasion”.
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,