UK Highlights New Offshore Penalty Regime

By Editorial 30 March, 2011

The UK is to impose a stringent new anti-avoidance regime on individuals with undeclared offshore income, with increased penalty rates designed to act as a powerful deterrent.

From 6 April, 2011 - the start of the UK's 2011/12 tax year - penalties for offshore non-compliance relating to the payment of income and capital gains taxes will be linked to the tax transparency of the country involved. There are to be increased penalties for under-declared income and gains from a variety of territories, which are henceforward to be grouped into one of three categories, based upon their information sharing agreements with the UK.

The categories and penalties are as follows:

These new penalty rates will first apply to Self Assessment returns concerning the 2011/12 income year, which are to be filed by January 31, 2013.

Commenting on the changes, David Gauke, Exchequer Secretary to the Treasury, said: "The time is running out for anyone going offshore to evade tax. Get your tax affairs in order, or face the risk of a penalty worth up to 200% of the tax evaded".

David Hartnett, Permanent Secretary for Tax at HM Revenue and Customs (HMRC), added: "This is the next step in increasing the deterrent against offshore non-compliance - and those who decide to take the risk will feel the full force of HMRC's new penalties".

Tags: Expatriates | Capital Gains Tax (CGT) | Compliance | Tax | Investment | Tax Compliance | Tax Avoidance | Law | United Kingdom | Enforcement | Offshore | HM Revenue And Customs (HMRC) | Penalties | HM Revenue And Customs (HMRC) | Individual Income Tax |


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