HMRC are analysing some 400GB of data in an attempt to tackle offshore tax cheats. HMRC along with the US and Australian tax bodies are investigating the complex offshore methods used by businesses and individuals for the purposes of tax avoidance.
So far, a number of trusts and companies have been identified in Singapore, British Virgin Islands, Cayman and Cook Islands that it is believed have been set up purely to assist businesses and individuals avoid paying tax. It is also believed that the data already discovered will help tax administrations all over the globe tackle the problem of tax evasion.
HMRC claim that over 100 people have already been identified during the course of the investigation, individuals who it seems have benefited from the offshore structures. Furthermore, HMRC has identified and will investigate around 200 accountants, lawyers and professional advisors who may have given advice on setting up these structures. UK residents are advised to review their tax arrangements to ensure proper compliance with the law, and to seek any advice necessary to ensure compliance. HMRC reminds UK residents that the organisation will look favourably upon early disclosure of tax irregularities, but criminal prosecutions and/or financial penalties (along with publication of tax-avoiders identities) may result in failure to comply with the law.
“The message is simple: if you evade tax, we’re coming after you. The Government has invested hundreds of millions of pounds to fund the fight against tax evasion, both at home and abroad. This data is another weapon in HMRC’s arsenal. Ahead of the UK’s presidency of the G8 this year, the Prime Minister has made it a key priority to drive an international effort to increase transparency and clamp down on tax avoidance and evasion. By working with our international partners in this way, we are again demonstrating our commitment to this work.” Stated George Osborne, present Chancellor of the Exchequer.
Jennie Granger, Commissioner and Director General for Enforcement and Compliance at HMRC said: “Working with the international tax community to pursue offshore evasion is another important step in closing the net on tax evasion. There is nothing illegal about an international structure, especially in a globally integrated economy and these arrangements may be perfectly legitimate and may already have been declared to HMRC. However they may involve tax evasion, avoidance or other serious offences by taxpayers. What has to stop is using offshore structures to illegally hide assets and income”.
