Offshore tax evaders to face tough new criminal sanctions

22 July 2015

Time is up for people who don’t pay their fair share of tax by hiding their money offshore, says Financial Secretary to the Treasury.

HMRC has published a package of civil and criminal options to tackle offshore tax evaders and the enablers of offshore tax evasion. The consultations include:

  • a new criminal offence for offshore evasion – so in the worst cases it’s no longer possible to plead ignorance in an attempt to avoid criminal prosecution
  • a new criminal offence for corporates who fail to prevent tax evasion or the facilitation of tax evasion on their watch
  • increasing the financial penalties faced by evaders – including, for the first time, linking a penalty to the value of the asset hidden offshore
  • new civil penalties on those who facilitate evasion so they will face the same penalty as the tax evader
  • publicly naming both evaders and those who enable evasion.

Speaking at HMRC’s Stakeholder Conference in London, Financial Secretary to the Treasury, David Gauke, said:

“Time’s up for people who don’t pay their fair share of tax by hiding their money offshore. People who evade tax, facilitate or turn a blind eye to tax evasion will now face powerful criminal and civil sanctions under our tough new regime.

We’ve already seen over 90 countries across the world sign up to automatically exchange information on taxpayers. This, together with our new sanctions, will mean there is nowhere left to hide for offshore tax evaders.”

In the last few years there has been huge progress in tackling offshore tax evasion. HMRC has already collected over £2 billion from previously undisclosed offshore income through agreements with Switzerland, Liechtenstein and the Channel Islands.

As announced in the March 2015 Budget, these offshore disclosure agreements will close early (31 December 2015) and be replaced by a tougher last chance facility ahead of the automatic exchange of tax information with over 90 countries, including tax havens, from 2017.