- Published on Saturday, 11 May 2013 08:07
- Written by CNS Business
The UK’s revenue and customs office is on the trail of hundreds of wealthy individuals and companies as well as their accountants and lawyers who they believe are using complex offshore structures to conceal assets from the tax man.
HM Revenue & Customs (HMRC) confirmed Thursday that it is working with the United States and Australian tax administrations (the IRS and ATO) on some 400 gigabytes of data that indicates the use of companies and trusts in a number of territories around the world, including the Cayman Islands. Officials said in a release yesterday from the UK government, that the information is still being analysed but early results have already identified over 100 people who benefit from these structures and some are now under investigation for offshore tax evasion.
The IRS, Australian Tax Office and HM Revenue & Customs have been working together to analyze this data and have uncovered information that may be relevant to tax administrations of other jurisdictions. Thus, they have developed a plan for sharing the data, as well as their preliminary analysis, if requested by those other tax administrations.
The analysis has also identified more than 200 UK accountants, lawyers and other professional advisors who advise on setting up these structures who will also be scrutinised.
“UK residents who use these offshore structures should review their taxation arrangements, and seek advice if necessary, to ensure they are compliant with UK tax law,” the HMRC stated. It is encouraging voluntary compliance and early disclosure of tax irregularities as failure to do so may result in a criminal prosecution or significant financial penalties and the possibility of identities being published, officials warned.
Chancellor of the Exchequer George Osborne said the message was simple.
"If you evade tax, we’re coming after you. The government has invested hundreds of millions of pounds to fund the fight against tax evasion, both at home and abroad," he said. "This data is another weapon in HMRC’s arsenal. Ahead of the UK’s presidency of the G8 this year, the prime minister has made it a key priority to drive an international effort to increase transparency and clamp down on tax avoidance and evasion. By working with our international partners in this way, we are again demonstrating our commitment to this work.”
Jennie Granger, HMRC Commissioner and Director General for Enforcement and Compliance added that working with the international community to pursue offshore tax evasion was an important step in closing the net..
“There is nothing illegal about an international structure, especially in a globally integrated economy and these arrangements may be perfectly legitimate and may already have been declared to HMRC,” she stated. “However they may involve tax evasion, avoidance or other serious offences by taxpayers. What has to stop is using offshore structures to illegally hide assets and income."
“This is part of a wider effort by the IRS and other tax administrations to pursue international tax evasion,” said IRS Acting Commissioner Steven T. Miller about the information exchange agreement. "Our cooperative work with the United Kingdom and Australia reflects a bigger goal of leaving no safe haven for people trying to illegally evade taxes.”
The IRS warns US taxpayers holding assets through offshore entities to review their tax obligations with respect to these holdings, seek professional advice if necessary, and to participate in the IRS Offshore Voluntary Disclosure Program where appropriate. Failure to do so may result in significant penalties and possibly criminal prosecution.