Pictured above: Chris Bond
A time bomb finally looks set to go off for thousands of
offshore account holders with the announcement by Danny Alexander,
Chief Secretary to the Treasury, that allows HM Revenue &
Customs (HMRC) to invest up to £900m until 2014/15 to create
a new offshore avoidance team and increase prosecutions for tax
avoidance.
Chris Bond, tax Director at PKF, comments: "HMRC has built up a
mountain of information on offshore account holders over the past
three years, but has so far failed to investigate many of the
individuals involved. To date, it has just relied on making vague
threats and offering tax amnesties to encourage people to come
forward voluntarily and pay up what they owe."
Past funding problems have meant that the teams working on data
obtained from banks have been reorganised every few months
resulting in little real progress against determined tax evaders.
This new funding should enable HMRC to finally get its act together
and aggressively pursue those who have spurned chances to use
either of the past amnesties: the Offshore Disclosure Facility or
the New Disclosure Opportunity.
Chris Bond explains: "The irony is that this crackdown will hit
just as the most beneficial tax amnesty yet gets into full swing.
The Liechtenstein Disclosure Facility (LDF) only requires
individuals to pay tax penalties of 10% by coming clean and many
individuals with offshore accounts still have an opportunity to
rearrange them and use the amnesty to come clean on tax arrears.
Creating a financial asset in Liechtenstein now can enable
individuals to take advantage of the LDF. Meanwhile individuals
caught by the new team that HMRC is creating, will face penalties
of up to 200% on their undeclared offshore income.
"It remains to be seen how effective the new HMRC team will be.
But if it collects anything like the £7billion in additional
tax revenue that the Government is predicting, that means an awful
lot of people who don't take the chance to put their tax arrears
right now will be paying very large tax bills - and, some of them
will wind up in court."
For more information about PKF, please visit their website here:
www.pkf.co.uk