If you are holding money in offshore accounts, it’s essential that you fully declare these accounts to HMRC to avoid crippling fines and possible prison time.
Burden of proof shifts
Up until now, HMRC has had to prove that individuals intended to evade tax on foreign income. But that’s set to change as the government looks to tighten the noose on people holding undeclared funds offshore.
The latest document, No Safe Havens, outlines plans to introduce a law that makes holding undeclared money offshore a criminal offence. Those convicted could face a prison sentence and hefty fines, even if there was no intention to evade taxes. This shift of the burden of proof means that intent to evade tax becomes irrelevant; intent is assumed – unless the evader can prove otherwise.
Penalties could increase
Currently, the penalties for offshore tax evasion can mount to up to 200% of the tax owed. This is now under review and government is considering whether the 200% limit should be raised. The government is also reviewing how to penalise individuals who are deemed to be moving money around to avoid detection and whether or not inheritance tax should be included.
More countries to sign exchange of information agreements
In the last year alone, the UK signed 10 more automatic exchange of information agreements, with many more to follow. Under these agreements, tax investigators can see names, addresses, account numbers and balances.
For any tax advice and assistance, please visit 1st Contact Tax Refunds. For a laugh, take a look at Ten unbelievable excuses by people who missed the Self Assessment deadline.