Tax evaders rush

Tax dodgers have made a mad dash to declare hidden sums of money tucked away in offshore accounts, HMRC has revealed.

With the threat of an immense double fine looming, a spokesman for HMRC told BBC News that they “received lots of last minute calls” from individuals who had indeed guarded their money and evaded tax via offshore facilities.

Bag full of tax dollars

The January 4th deadline was initially set for people to declare their intention of making a complete tax disclosure. People then have until 12 March 2010 to detail exactly how much money they have abroad, followed by a swift payment of all unpaid tax, plus interest, plus a 10% penalty. The 10% penalty is the incentive as those that don’t come forward and are subsequently found by HMRC may face a disturbingly higher penalty rate of 200%.

This isn’t to say that all people who have offshore dealings will have large payments, in fact a representative of accountants Saffery Champness said “The Revenue has given the impression that merely holding an asset offshore, like a home abroad, needs to be disclosed even though it may not have generated any taxable income or capital gain”.

Expats are not liable to income or capital gains tax in the UK. Workers who are temporarily non-resident may also not be liable for income tax but they should check with a suitable adviser. Expat & Offshore has an extensive section on Tax Solutions for Expats where you will find more information.