Spies Now Target Offshore Tax Cheats!

The taxman confirmed yesterday that it is working with the American and Australian tax administrations (the IRS and ATO) “on data which reveals extensive use of complex offshore structures to conceal assets by wealthy individuals and companies”. This prompted the Daily Mail to report today that: “Spy agencies, including the CIA, may have been involved in the operation” to unearth a “goldmine of data”.

HM Revenue and Customs say that they have 400 gigabytes of data, which is still being analysed;  but early results show the use of companies and trusts in a number of territories around the world: including Singapore, the British Virgin Islands, the Cayman Islands, and the Cook Islands.

So far HMRC has identified over 100 people who benefit from these structures and a number of those individuals have already been identified – and are under investigation for offshore tax evasion. They have also identified more than 200 UK accountants, lawyers and other professional advisors who advise on setting up these structures who will also be scrutinised.

The Chancellor of the Exchequer said: “The message is simple: if you evade tax, we’re coming after you”.

HMRC’s Director General for Enforcement and Compliance said:  “There is nothing illegal about an international structure, and these arrangements may be perfectly legitimate.  However they may involve tax evasion, tax avoidance or other serious offences by taxpayers.  What has to stop is using offshore structures to illegally hide assets and income.  UK residents who use these offshore structures should review their taxation arrangements, and seek advice if necessary, to ensure they are compliant with UK tax law. HMRC encourages voluntary and early disclosure of tax irregularities. Failure to do so may result in a criminal prosecution or significant financial penalties and the possibility of their identity being published”.

This follows hot on the heels of the breakthrough agreements signed by the UK this spring – which have seen several British Overseas Territories along with the Channel Islands and the Isle of Man all sign up to bank account disclosure agreements.

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