In a bid to reduce the nation’s high deficit Chancellor Alistair Darling will reiterate HMRCs aggressive stance on tax evaders during this year’s Budget hearing.
The government is fervently trying to find ways of reducing the deficit and Mr Darling will issue another warning to individuals that the government deems to be ‘tax cheats’. If people are found out to have hidden away funds in offshore locations they will be hit with a devastating 200 percent fine. Combined with other tactics Darling hopes to recoup over £1 billion per year.
Some economists claim that such bold statements about figures recouped often come with political motivation rather than economical motivation, however Darling is highlighting the dwindling public finances as reason for garnering as much tax revenue as possible. An accountant at Grant Thornton, a leading tax investigation specialist, said “These eye-watering fines for taxpayers with offshore bank accounts that 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. The message to any tax evaders out there is to make a full disclosure to the Revenue before it’s too late”.
Some offshore tax jurisdictions have information-exchange agreements so the main offenders are the people who have hidden their money in jurisdictions that England has no agreement with. Even if the country they have hidden money in does have an agreement with England then the hider will still have to pay a large fine, albeit smaller than if there is no agreement.
The OECD (Organisation of Economic Co-operation and Development) has made great effort to enable stronger information sharing, and now many countries have signed up including Liechtenstein, Belize and Andorra.