A recently developed online HMRC worldwide disclosure facility is launching, giving offshore evaders or tax planners a final chance to settle tax on their hidden wealth outside of the UK before new data sharing plans and harsher penalties are introduced.
The Worldwide Disclosure Facility (WDF) is the last opportunity for those still gripping hard to put things right with any outstanding tax or undeclared offshore capital or assets.
The new worldwide disclosure facility offers no exceptions and those who do come forward will have to pay the tax in full with added interest. PLUS, a minimum of 30% of the full tax as an extra penalty for evaders, who, could still face criminal charges and prosecution. The quality and sincerity of information disclosed will be taken into account also. It is always advisable to come forward and ensure any outstanding tax settlements are in order as soon as possible.
The Government has made it very apparent that it is fully committed to fighting all forms of tax evasion. The changes outlined here and the new principles behind them apply to both onshore and offshore issues, leading to stronger and harsher penalties for tax evasion in all of its forms.
Starting today, HMRC will take into account how long it has taken for someone to put their tax affairs in order when calculating penalties. This means that those who have delayed disclosing or ignored previous approaches will no longer receive a reduction for disclosure.
The last opportunity comes before HMRC starts to receive a huge amount of data on offshore accounts which will close in even more on tax evaders; they will be hit by tougher consequences. This will be in addition to the offshore information HMRC receives every year that is used to make settlements of hundreds of criminal investigations much quicker.
HMRC director general of enforcement and compliance, Jennie Granger, said:
“HMRC is getting even tougher on tax evasion. We relentlessly pursue tax evaders to ensure they pay every penny of the taxes and fines they owe, pushing for the toughest possible sanctions where appropriate. We’ve closed old disclosure facilities, increased penalties and ramped-up our powers to tackle evaders and those that help others evade. Alongside this, international cooperation through global tax transparency is making it easier for us to catch evaders, as we increasingly receive more information about financial assets which people had hoped would remain hidden. Our message couldn’t be clearer: there are no safe havens left for tax evaders and no-one should be in any doubt that the days of hiding money offshore with impunity are gone.”
Continued guidance and details on the changes to disclosure and the worldwide disclosure facility have been released today. Those who don’t come forward will have to face up to the new requirement to correct (RTC) penalties being debated on, with one option being considered, a 100% penalty, which is considerably higher than minimums currently.
These latest advancements add to the wide range of measures introduced by the Government to harshen sanctions for anyone involved in offshore tax evasion. This includes a new criminal offence for tax evasion, increased civil consequences for offshore tax evaders as well as new legislation meaning those who enable and promote evasion outside the UK will be treated as equally guilty.
In 2014-15 HMRC brought in £26.6 Billion from tackling tax evasion and avoidance, and since 2010, it has collected over £2.4 Billion from offshore evasion initiatives, including over 10,000 disclosures.
No matter what, unfortunately, your offshore finances are now at risk.
The quicker this is dealt with, the better.