HMRC continues clamp down on undeclared offshore income,
capital gains and tax avoidance schemes
Today's announcement in the Chancellor's speech that further
anti-avoidance and evasion measures will be introduced has shown a
red card to taxpayers wishing to use artificial arrangements to
shelter their income, and to anyone concealing assets or monies
offshore, says leading business and financial advisers Grant
Thornton.
The changes on undeclared offshore assets include raising
penalties up to 200% where there is no agreement from the country
holding the bank account or assets to automatically disclose them
to HMRC.
"These eye watering fines for taxpayers who hold bank accounts
offshore which have not been declared to the UK taxman could
ultimately lead to certain individuals paying the Revenue more than
they had in the undeclared account in the first place,"says Heather
Taylor, Tax Investigations specialist at Grant Thornton.
"The Government has also been stepping up its campaign on
targeting wealthy individuals and today's move to change the
definition of what is a tax avoidance scheme has widened the posts
to leave HM Revenue & Customs with an open goal to aim at,"
continues Taylor.
However, the announcement today that Belize, Dominica and
Grenada will soon sign Tax Information Exchange Agreements which
will limit penalty exposure on any UK taxes due on undeclared
offshore matters to 100%, means that anyone with an undeclared
account in these countries need not fear the new 200%
penalties.
FURTHER ANTI-AVOIDANCE MEASURES ON THE WAY
"The government has also moved decisively to ensure that income
is now not taxed as capital", continues Taylor.
The Disclosure of Tax Schemes arrangements (where promoters of
tax schemes must notify HMRC when a new planning arrangement is
developed) will be extended to cover 'income to capital'
arrangements from autumn 2010.
There is also a widening of the terms of what constitutes a 'tax
avoidance scheme' and a requirement for earlier notification of
arrangements to HMRC. The taxman can also request a list of client
names and addresses from a promoter and will specifically target
all arrangements seeking to circumvent the new 50% higher rate of
Income Tax.
HMRC POWERS GO FURTHER TO INCLUDE OPENING OF POST AND
CRIMINAL OFFENCES FOR LATE PAYERS
This Budget has seen HMRC Powers go into overdrive with hard
pressed employers, who have a past history of late payment or
payment difficulties, being required to lodge a deposit of HMRC's
choosing with the taxman.
It will now become a criminal offence to fail to lodge such a
deposit if required to do so by HMRC, with a potential fine of up
to £5,000 and a criminal conviction.
"These extension of powers are truly astounding. There is also a
further widening of HMRC powers which include a right to open post
without notification to the recipient. Whilst this initially
applies to suspected 'Tobacco Smuggling' this could be extended in
what is rapidly becoming a big brother state.
"All eyes will be on what HMRC will be imposing next as their
powers relentlessly increase," concludes Taylor.
ENDS
For Budget media enquiries please contact:
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