Penalties Against Tax Evasion

Penalties Against Tax Evasion : The HM Revenue and Customs (H.M.R.C.), HM Treasury and Jane Ellison MP have announced new proposals that include new measures to be taken against tax avoidance and evasion. Service providers that advise on how to avoid tax will be facing tough penalties. These proposals are included in a recent consultation document issued by H.M.R.C. Under the plans set out in the consultation paper, enablers of tax avoidance could be facing fines of up to total amount of underpayment included in tax avoidance scheme in question.

Penalties Against Tax Evasion :The Proposals

Penalties Against Tax Evasion : New penalties discussed against tax evasion. Information to the government will start to be available on the offshore finances of UK taxpayers and the government is proposing requiring taxpayers with offshore tax liabilities to come forward. The matter of tax avoidance is receiving more attention after taking advantage the new international reporting standards that strive to increase transparency and identify tax avoidance offshore. From October data regarding offshore finances of UK tax payers will start to be collected and measures will be taken for immediate collection of accrued taxes. Also tax payers are prompted to review any offshore holding companies and consider whether or not they have complied with their obligations. The penalties proposed will be massive, three times as much as the actual tax amount owed to the government. In October, the HMRC will be receiving information on income, dividends and bank account balances of UK residents in overseas territories such as Jersey, Guernsey and the Cayman Islands and it is highly likely that investors with undeclared income will be detected.

Following the above, more data will be collected during September of next year due to the implementation of the Common reporting Standard (CRS) which as explained again is a global agreement between a large numbers of countries to share financial information automatically.  By September 2018 bank account information will be shared among 101 countries worldwide.New criminal offences have been introduced, and civil sanctions for offshore tax evaders have increased and civil sanctions for those who facilitate have also been introduced proposing to fine advisers and accountants found to have facilitated such scheme.

Conclusion

Not only tax evaders and those who avoid taxes need to be concerned and think twice before deciding not to comply, but also that service providers such as tax advisers, accountants, auditors, business consultants that assist in such schemes. It is clear that tax avoidance and tax evasion will start to diminish but remains to be seen in the near future,