New Tax Penalties To Be Introduced

A final warning has been issued to those with offshore assets not disclosed to HMRC, who will now face increased penalties for non-compliance.

From 6 April 2011, the new tax penalties for offshore non-compliance with the requirements for income and capital gains tax will be increased up to a maximum of 200% of the undeclared tax. The penalty will be dependent upon where the assets are located, with the highest penalties reserved for countries such as Barbados and Monaco which do not have information sharing agreements with the UK .

HMRC have been taking an increased interest in undisclosed offshore tax liabilities and in 2009 served notices on more than 300 UK and foreign banks to disclose information to HMRC about customers who have offshore accounts.

Dave Hartnett, Permanent Secretary for Tax, at HMRC said: "We are serious about tackling offshore evasion. Hiding tax liabilities offshore believing that you will never be discovered is no longer a realistic hope.”

“[HMRC] have made significant progress tackling international tax evasion and closing in on tax havens in recent years. This is the next step in increasing the deterrent against offshore non-compliance and those who decide to take the risk will feel the full force of HMRC’s new penalties.”

Irwin Mitchell can provide specialist advice to individuals who have offshore assets not disclosed to HMRC, whether this is an approach to HMRC on a “no-name” basis, or you have received notification of a Code of Practice 9 investigation.

We are able to coordinate with your existing accountants or instruct other professional advisers on your behalf. We also advise individuals on the Liechtenstein Disclosure Facility which offers significantly reduced penalties for those wishing to come forward and disclose any offshore assets to HMRC.