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UK, US and Australia swoop down on offshore structures

Chancellor warns tax evaders 'we're coming after you' as data about advisers and clients is analysed

16 May 2013

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Chancellor warns tax evaders 'we're coming after you' as data about advisers and clients is analysed

Accountants, lawyers and other professionals who advise clients to extensively use complex offshore structures for concealing assets are being targeted as the UK continues to tackle tax evasion.

HMRC has announced it is collaborating with the United States and Australian tax administrations (the IRS and ATO) to analyse 400GB of data that has already identified more than 100 wealthy individuals and 200 professionals who are up for scrutiny.

"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," said Jennie Granger, HMRC commissioner and director general for enforcement and compliance, in a statement made on 9 May.

"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."

Early indications point to companies and trusts in a number of territories including Singapore, the British Virgin Islands, the Cayman Islands, and the Cook Islands.

The data also exposes information that may be shared with other tax administrations.

Vast intelligence

John Cassidy, partner at Crowe Clark Whitehill, said HMRC has become much better at converting its "vast amount" of intelligence into targeted investigation cases. "Whether that data comes from agreements with other territories, is stolen from an offshore bank or some other source is largely irrelevant as the fact is it is in the hands of HMRC and will be made use of."

George Osborne said the government has invested hundreds of millions of pounds to fund the tax evasion battle in the UK and worldwide and "the data is another weapon in HMRC's arsenal".

Speaking at the end of the two-day summit of finance ministers and central bank chiefs in Aylesbury on Saturday (11 May), he announced the G7 group of industrialised nations had agreed collective action needs to be taken to target tax abuse.

He said there was strong agreement among the UK's fellow member nations - the US, Germany, Japan, Italy, France Canada - on tackling tax cheats.

Cassidy added: "The best - and certainly the cheapest - course of action for anyone with tax problems is to come forward and make a disclosure. In most cases involving offshore assets and structures this disclosure can be routed through the bespoke facility that HMRC has agreed with Liechtenstein, whether or not the tax payer has an interest in that jurisdiction already.

"All UK tax problems, whichever jurisdiction they arise in, can be swept up in a single disclosure which then gives the tax payer certainty and freedom to use the previously hidden assets going forward."

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Tax & Wealth structuring