Further penalties on those keeping untaxed wealth
The Chancellor, Alistair Darling set out his measures in Budget 2010 for a crackdown on offshore account holders. In the pre-election Budget, Alistair Darling had already laid out a number of anti-avoidance measures, namely signing tax sharing agreements with Dominica, Grenada and Belize, and imposing a 200 per cent tax penalty for those with irregularities relating to offshore accounts.
Also in the small print are the findings of the Hidden Economy Advisory Group that was set up after the pre-Budget report, which said there is ‘currently no clear route for those with undeclared tax to establish their position and disclose their liabilities’.
HMRC said it will also be looking at how to educate people on the “unacceptability of evading tax”. The crackdown on wealthy individuals and large companies using offshore accounts will raise an extra £1.5bn for the Treasury, the Chancellor said in his Budget speech.
Further penalties on those keeping untaxed wealth in offshore havens will increase from April, while attempts by companies to “lose” profits offshore and pay less tax will come under closer scrutiny.
Measures will also safeguard £4bn of tax receipts that Treasury officials feared would be unpaid by businesses and individuals using homegrown tax avoidance schemes or offshore trusts.
The Chancellor said: “While people are suffering hardship, it is all the more unfair that some are escaping their tax obligations. I am determined to continue our successful drive to prevent avoidance and evasion. Measures in this Budget will bring in additional tax worth half a billion pounds while protecting £4bn worth of revenues by 2012/13.”
The Treasury said that by 2012/13 it expects to save at least £155m from limiting double taxation reliefs on company profits. An improved disclosure regime, which forces those with money offshore to declare the amounts, will raise £125m by 2012/13, while a deal with Liechtenstein is due to bring in £500m over three years.
