HMRC steps up pursuit of UK tax evaders hiding money in Bermuda, Cayman Islands and other UK Tax havens

22 Jul 2013 | 10:44 am | 2 min. read

26% increase in the number of HMRC requests for offshore bank account data

The number of requests for dataHMRC made to Crown Dependencies and Overseas Territorieson possible tax evaders hit a record highin the last year as the Government cracked down heavily on offshore tax havens says Pinsent Masons, the international law firm.

HMRC made 72 requests for financial data to significant offshore tax havens such as the Cayman Islands, Bermuda, and Jersey in the last year (ending Dec 31 2012) regarding personal and business taxes, up 26% on the57 in 2011 and 32 in 2010.

Pinsent Masons says the figures show thatHMRC are accelerating their assault on people sheltering money unlawfully from HMRC in the UK Crown Dependencies and Overseas Territories.

The UK's Crown Dependencies and Overseas Territories have come under increasing pressure from the UK Government in Whitehall tostart co-operating more closely with HMRC in order to root out tax evaders.

Pinsent Masons Director, Reg Day, commented: "HMRC are stepping up their efforts to track down tax evaders bygetting offshore tax havens to provide more and more information about money being sheltered offshore."

"This will send shivers down the spine of those individuals and business with any undisclosed assets in places like Bermuda and the Cayman Islands. HMRC is closing the net and will come down heavily on those not paying tax, so individuals and businesses with money sheltered offshore should get on the front foot before HMRC finds out and begins an investigation."

The news comes as HMRC finalises new tax compliance information sharing arrangements with the Crown Dependencies and Overseas Territoriesamongst other measures that are set to catch an increasing number of tax evaders.

  • Under proposed tax compliance information sharing arrangements, HMRC will soon be able to obtaingreater levels of information about bank accounts held by UK taxpayers in the Crown Dependencies and Overseas Territories automatically. The new rules will be closely modeled on the Foreign Accounts Tax Compliance Act – US legislation which sets out new reporting requirements for foreign financial institutions with accounts held by US national residents overseas.
  • In May, all Crown Dependencies and Overseas Territories with significant financial centres announced a commitment to tackle tax evasion with the aim of setting a new standard of international tax transparency.Many offshore tax havens have also agreed to sign up to the Multilateral Convention on Mutual Assistance in Tax Matters – a data sharing initiative led by the OECD.

Reg Day says: "Better co-ordination between HMRC and the Crown Dependencies and Overseas Territories will provide HMRC with much more of the information it needs to start enforcement action against individuals and businesses it suspects of tax evasion. Those with undisclosed assets need to be proactive and approach HMRC before it's too late."

"Taxpayers are able to declare any offshore assets to HMRC via the Liechtenstein Disclosure Facility, a tax amnesty limiting the risk of criminal prosecution.Taxpayers with tax irregularities in offshore havens can come forward under the Liechtenstein Disclosure Facility and disclose and settle their tax liability, avoiding action from HMRC."

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