As part of the general drive to crackdown on tax evasion and non-compliance, the Chancellor has allocated additional funds of £800m which he expects to recover 10 times over the rest of this parliament. He confirmed an intent to press ahead with measures outlined in the Summer through four offshore consultations which closed in October. The anticipated Strict Liability Criminal Offence for offshore tax irregularities is now to be brought into the tax code, together with rules outlining stricter civil financial penalties based on asset value. In addition new criminal and civil sanctions will be brought against those who in future enable and facilitate tax evasion offshore, including an increased and extended use of HMRCs public naming and shaming powers.
As payment by electronic means continues to increase at the expense of cash transactions, HMRC seeks views by consulting on the impact this may have on the hidden economy and potential other ways of side-stepping the tax net.
A further consultation is promised under which new penalties are proposed for those failing to correct past offshore tax non-compliance. With this in mind, we still await specific details of the promised new worldwide disclosure opportunity which will replace the existing facilities, including the Liechtenstein Disclosure Facility (LDF). Registration under the LDF will not be possible after 31 December 2015, meaning that those with onshore and offshore tax issues will no longer be able to avail themselves of the LDF’s favourable terms, which include immunity from criminal investigation for tax issues. We already know that the new facility will be a less beneficial way of putting things right, so those with potential disclosures to make should take advice quickly about coming forward by using the LDF.
Contact our specialist tax risk and investigation team to find out how our service can help you.