Alistair Darling announced that he would be closing the net tighter around tax dodgers by introducing measures that will bring in an extra 500 million a year.
Among a large package of measures, the news that raised the biggest cheer from the Labour benches was the announcement of agreements to share tax information with Dominica, Grenada and Belize, the latter being the secretive tax haven that is home to Lord Ashcroft, the billionaire Tory donor.
The Chancellor also promised higher penalties for offshore tax evaders with money in tax havens that do not automatically share information with the UK authorities.
Where a jurisdiction exchanges information with the UK only on request, tax dodgers could be subject to penalties of up to 150 per cent of the tax owed. Where a jurisdiction shares no information with HM Revenue Customs, penalties will be at twice the present rate or 200 per cent of the tax owed. The new penalty framework will be introduced on April 1, 2011
Related LinksCredit adjudicator for small businessesStamp duty of 5% to hit London homebuyersDarling"s plan: at-a-glance guideMultimediaYou and the Budget: ask our expertsThe Government has already claimed some success in weeding out offshore tax evaders after signing a previous deal with Liechtenstein which it expects to bring in around 1 billion of extra revenue.
It also introduced an offshore disclosure facility in the Budget last April that runs until the end of this month. Those with money in offshore accounts have until then to inform the Revenue if they have unpaid tax or duties and to settle any tax bills at a favourable penalty rate of 10 per cent.
Paul Harrison, UK head of tax investigations at KPMG, the accountant, said: The changes announced today will provide future governments with a big stick for dealing with off-shore tax evasion. If you choose to deliberately evade UK tax by using a jurisdiction which is not transparent from HMRCs perspective, you will run the risk of being penalized twice as heavily, from April 2011.
Clearly any reasonable attempt to stamp out tax evasion must be a good thing for all UK tax payers. However, HMRC need to take care that they differentiate between those who have deliberately withheld tax from them, and those who may have unwittingly fallen foul of the notoriously complex tax legislation which governs off-shore income and gains for UK residents.
Other measures announced today were aimed at specific tax-avoidance schemes. Mr Darling promised action to prevent attempts to avoid tax and national insurance contributions through the use of employee benefit trusts and other arrangements to disguise salary payments.
Legislation will also be introduced in Finance Bill 2010 to stop companies using tax-advantaged Company Share Option Plans.
There will also be new rules to block tax avoidance schemes that exploit the rules for tax relief on gifts of qualifying investments to charities.
The Exchequer estimates that it loses up to 40 billion each year through illegal tax evasion and aggressive but legal tax avoidance.
No comments:
Post a Comment