You are here

Tax disclosure opportunities to close early

The government is successfully making it extremely difficult to hide undeclared funds from HMRC

19 March 2015

Add comment

All existing tax disclosure opportunities will be closed by the end of 2015 instead of 2016, as the government continues its relentless drive to quash tax evasion.

The change is one of various new policies and legislation announced in the 2015 budget geared towards increasing tax revenue by £3.1bn.

The budget states: 'The government will toughen sanctions for those who continue to evade tax by closing the existing disclosure facilities for tax evaders early.

'A tougher 'last chance' disclosure facility will be offered between 2016 and mid-2017, with penalties of at least 30 per cent on top of tax owed and interest and with no immunity from criminal prosecutions in appropriate cases.'

The announcement should send alarm bells ringing for anyone with anything to declare to HMRC, says Chris Moorcroft, a senior associate at London law firm Harbottle & Lewis, as there are fewer and fewer places to hide undeclared funds.

He commented: 'Exchange of information and tax evasion remain high on the government's agenda. Announcing an earlier closure of more generous disclosure facilities in favour of a new, less generous one, the government is forcing those with undeclared funds to come clean now or face the consequences.

'Given the combined effects of transparency, more enquiries and stiffer penalties, individuals with undeclared funds shouldn't waste another moment.'

John Cassidy, a tax investigation partner at tax and advisory firm Crowe Clark Whitehill, also advices that tax payers waste no time in coming clean about their affairs.

'Additional resource has already been supplied in the form of a doubling of the size of the specialist investigation team at HMRC and the formation of specialist offshore investigations team,' Cassidy warned.

'Adding yet more capability illustrates that HMRC is serious about this.'

He continued: 'The message is clear - use the Liechtenstein Disclosure Facility before it is too late. It is far less stressful than a serious HMRC investigation and an experienced tax investigations practitioner will be able to guide clients smoothly through the process.'

International tax cooperation

The budget also states that the UK has reached agreement with 92 nations to exchange information on bank accounts automatically every year.

In addition, from 2016 'HMRC will receive a wide range of information on offshore accounts held by UK tax residents including names, addresses, account numbers, interest and balances', from crown dependencies and overseas territories.

'HMRC will therefore have plenty of data that was not previously accessible in order to investigate or challenge a person's tax position in relation to those assets,' said Cassidy.

'To help with this, the government plans to invest £4m in data analytics resource to maximise the yield.'


Categorised in:

Tax & Wealth structuring