The UK government and the Isle of Man have agreed to clamp down on those who “try to hide their money offshore”, HM Treasury says in a statement.
Part of the government’s offshore anti-evasion strategy, to be published later this year, includes an automatic tax information exchange agreement and the setting up of a disclosure facility.
Under this facility, investors with accounts in the Isle of Man will have three years to settle their affairs before penalties.
The disclosure facility will be in place from April 6, 2013, until September 2016. It means liabilities arising from April 1999 must be fully disclosed. There is a guaranteed penalty rate of 10% for returns to be filed before April 2009, and 20% afterwards.
Accountant and advisory firm James Cowper estimates that the deal could mean “hundreds of millions of pounds” in tax revenues for the UK, which would otherwise be hidden away in the Isle of Man.
“We are seeing that the government is becoming increasingly proactive in its drive to root out tax evaders,” says Stephen Barratt, private client director. “This is the first crown dependency to aid the clamp down on people avoiding their taxes and it puts pressure on other tax havens to follow suit.”
Jersey and Guernsey said on November 30, 2012, that they were in discussions with HM Treasury on enhanced information exchange.
On January 1, 2013, the government’s agreement with Switzerland to recover previously unpaid UK tax on money hidden in Switzerland came into force. HM Revenue & Customs (HMRC) predicts that the agreement will bring in more than £5 billion (€5.8 billion) over the next few years. On January 29 HMRC received the first installment of £342million.
HMRC says tax transparency and promoting further automatic information exchange will be a focus of the UK’s G8 presidency. George Osborne, chancellor of the exchequer, says: “The government is committed to tackling tax evasion and this agreement will greatly enhance HMRC’s ability to clamp down on those who try to hide their money offshore.”
©2013 funds europe