5.6 Million Offshore account details handed over ….  No surprise when HMRC confirms new strategy ‘No Safe Havens 2019’

Since 2010, the government has introduced over 100 new measures to tackle tax non -compliance, which have raised some £200 billion in additional revenue.

This has been helped by the global exchange of information, where over a hundred countries have committed to automatically exchange financial account information under the Common Reporting Standard (CRS). In 2018 alone, HMRC received information connected to around 5.6 million UK taxpayers offshore accounts, and information about the financial interests of some 3 million individuals resident in the UK, or entities they control. They are already in the process of checking this information, to detect potential non declaration.

The ‘No Safe Havens 2019’ strategy issued in March 2019, builds on HMRC’s previous success, and unlike previous strategies, this focuses on all types of mistakes, not just tax evasion or avoidance, and companies as well as individuals and trusts. It outlines how they will ensure offshore tax compliance, according to their main objectives:

• To maximise Revenues and bear down on avoidance and evasion
• Transform tax and payments for customers
• Design and deliver a professional, efficient and engaged organisation

They will do this by focusing on 3 areas:

• Leading internationally – championing International tax transparency
• Assisting compliance – helping customers get offshore tax right first time
• Responding appropriately – helping those who make mistakes; robustly challenging those who evade tax; and applying sanctions to those who help them

They have also extended powers to look back up to 12 years, raise assessments to collect outstanding tax, and if appropriate, impose a new strict liability criminal offence.

The most significant change with this strategy, is that this criminal offence could now apply, whether or not it was intentional, by mistake, or based on a different interpretation of the rules.

Thousands of letters have already been issued by HMRC to UK taxpayers, stating that they have information relating to offshore income or gains, but instead of outlining any details, they suggest an attached statement is signed and returned. This statement goes to on to confirm that any individual who signs this “understands that choosing to make a false statement or complete a false certificate is a criminal offence that can result in an investigation and prosecution” This certificate creates a significant risk of criminal prosecution, even if innocent error is involved, and specialist advice should be obtained before any such declaration is considered.

HMRC really do mean business, and their increasingly hard line attitude does not appear to allow for genuine mistakes. It is therefore more important than ever before to ensure that appropriate professional advice is obtained to manage tax compliance, and that’s where we can help.

For more information please contact Lynn Gracie, or your usual AAB contact.