Last year HMRC collected data on 5.67 million UK residents’ offshore financial interests and it is now beginning to detect possible non-compliance.
This has allowed HMRC to move away from a policy of encouraging voluntary disclosures with lower penalties to heavily punishing those who have not taken the opportunity to come forward under the various worldwide disclosure facilities.
At the same time, the requirement to correct rules put the onus on individual taxpayers to come clean about their offshore interests by last September by informing HMRC of past irregularities. From 1 October 2018 tougher penalties called ‘failure to correct’ came into force.
Latest figures on offshore tax compliance show that HMRC has recovered £2.9bn in lost tax revenues since 2010 purely from targeting offshore abuse, before the Common Reporting Standard came into force in September 2018.
Since 2016, HMRC has increased its investigations into the country’s wealthiest offenders six-fold.
HMRC analysis of offshore risk and the newest strategy, No Safe Havens, sets the direction for the next phase of the government’s response to existing and emerging offshore risk.
This strategy brings together HMRC’s response to offshore non-compliance, including evasion and avoidance, but will also focus on working with agents and intermediaries to help their clients avoid errors and make it simple for them to identify and correct errors.
Mel Stride, Financial Secretary to the Treasury said: “I want the UK to remain at the forefront of fighting serious organised crime and want us to be the global leader. HMRC’s fraud investigators show how with cutting edge technology and the right staff, we can tackle global tax fraud, setting an international example to other countries in this crusade.”