HMRC’s warning to offshore tax dodgers to correct any irregularities or face serious penalties should be taken seriously, says Gary Gardner, tax partner at leading accounting, tax and advisory practice Blick Rothenberg.
HMRC’s press release issued of March 6th bristles with serious intent warning those with offshore assets that time is fast running out before the new tougher penalties for failing to correct offshore irregularities or non-reporting take effect on 1 October 2018. HMRC’s stark advice is that “anyone with overseas assets needs to put their cards on the table quickly or risk much bigger fines”, or worse!
Gary Gardner, tax partner, at Blick Rothenberg, said: “It would be a very regrettable and expensive mistake to hope that this is just more ‘empty talk’ as HMRC have made it clear they will prosecute the most serious cases of tax evasion.
“Given criticism from both the National Audit Office (NAO) and the Public Accounts Committee (PAC) that HMRC are not doing anywhere near enough to combat evasion and avoidance by high net worth individuals (HNWIs) the pressure on HMRC to crack down on overseas evasion and avoidance using civil and criminal sanctions is greater than it has ever been.”
Gardner suggested that those who are not deterred by the idea of a civil or non-criminal investigation should think again given that the penalties for failing to correct any errors or omissions relating to offshore interests will attract a penalty of up to 300 per cent of the unreported tax shown to be due.
In addition, a further asset-based penalty will be applied of 10 per cent of the asset value where it becomes clear the taxpayer was aware by the end of the 2016/17 tax year that they had offshore non-compliance to correct.
Gardner said: “Likewise, those dealt with civilly rather than criminally can also look forward to some free publicity, as HMRC will not hesitate to name and shame those with a failure to correct penalty exceeding £25,000. This is not a particularly large penalty for the HNWIs, but is another weapon in HMRC’s armoury.”