The British tax and finance service HMRC has launched a new campaign targeting those using offshore tax avoidance schemes. Set to be introduced on October 1st, the authority is preparing to unleash a wave of fresh investigatory practices and penalties, designed to stamp out tax dodging schemes.
Russell Smith, Director of British-based finance firm RS Accountants , advises that these are more than just warning shots being fired by HMRC: “With recent surges in public tax-dodging cases, such as the Panama Papers, governments are under pressure to prosecute wealthy individuals avoiding proper taxation.”
In an official press release, HMRC claims to be arming itself for war against tax evaders. By the end of the year, they will have new powers to punish those caught avoiding tax. Fines of up to 300% of unpaid taxes can be levied, alongside a second penalty that equates to 10% of offshore asset value and, potentially most damaging of all, public naming and shaming. Ownership of offshore assets is not illegal; however, they must be declared on tax returns with appropriate fees paid to HMRC. The illegal practice occurs when offshore accounts are not disclosed properly to authorities and instead hidden to avoid payment of foreign-income tax.
The publication by HMRC offers a stark reminder of Theresa May’s commitment to stamping out tax evasion. In 2016, the British Prime Minister issued a statement warning offshore account holders that ‘we’re coming after you.’
“Public spending budgets are under strain. HMRC needs to fuel the economy, and one avenue it plans to chase aggressively is catching out wealthy tax-dodgers and ensuring they contribute what they should. These aren’t just words. These are real threats. They will catch you.” Smith warns.
“The state already collects a massive amount of data on offshore assets, remaining vigilant for signs of illegal tax avoidance schemes. If you are discovered, they already have the power to cause serious damage. When the new measures become enforced, this damage will only be amplified. Failure to take this new commitment to catching tax avoidance seriously would be a massive oversight. HMRC advises that now is time to lay your cards on the table and be honest about offshore assets. Anyone who this statement applies to should consider it very carefully.”
Company: RS Accountants
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