The taxman is now receiving unprecedented amounts of information about offshore: bank accounts; financial structures; assets; companies; and trusts - held around the globe by UK citizens. HMRC is going to investigate everyone with an foreign bank account etc, who does not make a Voluntary Disclosure. The Tax Investigations could be on Criminal lines.
But as well as the stick of a Criminal Tax Investigation HM Revenue and Customs have created various voluntary Tax Disclosure Facilities: such as the dedicated Worldwide Disclosure Facility and the well-established Contractual Disclosure Facility. These official programmes offer taxpayers the opportunities to clear up historic tax problems on optimum terms: e.g. guaranteed non-prosecution, and the lowest legal penalties.
Meanwhile, HMRC's offshore Tax Investigation programme continues apace. Delaying coming forward could have serious and unwelcome consequences. If you are already under Enquiry it is essential that you and your adviser properly address the taxman's concerns and suspicions - in order to: avoid a long-running and intrusive enquiry; to minimise the risk of prosecution; and to reduce the penalties.
130 countries so far have signed up to the global Common Reporting Standard (CRS). Under the terms of CRS, financial institutions and professional advisers in those countries are now passing information electronically to a common pool (including the UK taxman) concerning: offshore financial institution accounts; insurance products; and other investments - including those held through overseas structures, such as offshore companies and trusts. The data includes the identity of the direct owner of the accounts or assets, or details of the ultimate beneficial owner of the entity holding the asset. It includes: names; addresses; dates of birth; balances on accounts; and details of certain transactions.
The 100+ CRS countries began the annual information share with HMRC in 2018. Additionally, the G5 countries (United Kingdom, Germany, France, Italy and Spain) now also automatically share details about the beneficial ownership of companies; trusts; and properties in their countries. And they are gradually rolling out this programme around the globe. Further, the UK's Automatic Exchange of Information Agreements with the British Crown Dependencies (i.e. Isle of Man; Guernsey; Jersey; and Gibraltar) and the British Overseas Territories (including: the Cayman Islands; Bermuda; the Turks and Caicos Islands; the British Virgin Islands etc) means that each year those territories all pass information to HMRC about financial accounts held there.
The taxman has started to investigate every case where information is received. Some of these Investigations are on Criminal lines.
Severe Penalties for Offshore Matters
Individuals with Tax Irregularities relating to any offshore issues can face harsh tax-geared penalties. That is, Penalties which are set as a percentage of the additional tax payable. Usually the Penalty will be higher than the Tax bill itself. The Offshore Penalties are far more severe than for solely onshore matters.
- Penalties can be up to 300% of the tax due - plus a percentage of the value of the offshore asset itself.
- The Penalties can be heavily discounted according to the timing and the quality of any Tax Disclosure.
- For those people who don't fully co-operate and comply, the bill of Tax plus Penalties could be more than 4 times the figure of the Tax originally evaded.
- As usual, Interest will also be charged at a commercial rate on the late paid Tax.
- The total amount of Tax; Interest; and Penalties could exceed the total value of the offshore asset itself.
- The "naming and shaming" provisions could also apply: meaning personal details can be published - where the undeclared tax is more than £25,000 for all years, and HMRC are not happy with the level of co-operation or the quality of Disclosure.
- And the course, HMRC reserve the usual right to Prosecute in the most serious cases. Where HMRC achieve a conviction then they will use the Proceeds Of Crime Act to confiscate the so-called "Criminal Assets".
How can Lynam Tax Disclosure Experts help me?
Our Tax Disclosure Specialists have a huge amount of experience in dealing with Investigations and Disclosures in respect of UK residents with offshore bank accounts and other assets. We have the training; knowledge; skills; and deep experience to properly manage your Offshore Disclosure to HMRC. We can reduce the stress and get the best solution for you. And if you are already under Investigation our expertise will get you the best possible outcome. HMRC use dedicated specialist investigators to deal with Offshore Matters: you need dedicated, experienced, and committed experts on your side.
To find out how we can help you and for a free, confidential and no obligation discussion, call Paul today on: 0845 643 9997
NB: Don't Wait - The Taxman may already have your details!!
Lynam Tax Enquiry Experts HELP ME?
- Offshore Bank Disclosures
- Contractual Disclosure Facility/ COP9
- Appeals / Tribunal Hearings
- Worldwide Disclosure Facility: Tax Amnesty
- Fraud Investigation Service
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We specialise in managing all Tax Enquiry, Tax Disclosures & Tax Disputes with HMRC.
We will help you throughout the Tax Investigation or Disclosure and save you money, so you can concentrate on running your business and enjoying your private life.
For a helpful, sympathetic, confidential and no obligation discussion: