MIKE COADY

Financial Expert | Business Excellence | Growth Expert
Mike is an award winning financial expert and a well-known leader in the financial industry. Having taken two of his previous firms to Chartered Status in the UK and also achieved the prestigious National IFA of the Year Award – Highly Commended. In addition, Mike is qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Fellow of the Institute of Sales Management (FISM), and a Fellow of the Institute of Directors (FIoD).
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Chancellor unveils tough new laws to crack down on tax evaders

Mike CoadyFinancial News Chancellor unveils tough new laws to crack down on tax evaders

Chancellor unveils tough new laws to crack down on tax evaders

Individuals who keep large amounts of undeclared income in offshore accounts could face jail and hefty fines, as the government brings in tougher laws to catch tax evaders.

As has been widely reported, the UK has joined other G20 countries in stepping up the fight against tax evasion.  At present, HMRC can only convict someone of tax avoidance if it is actually proven that were actively trying to hide money from the authorities.  But it was announced at the end of last week that laws are to be made simpler and a ‘strict liability’ offence measure implemented, meaning if people fail to show they were not intentionally avoiding tax, they will be hit with harsh penalties.

Referring to the new laws which are due to come into effect in 2015, George Osborne said last week: “This will provide a significant weapon in our fight against tax evasion, and make it easier to secure prosecutions.”  However the new laws would only relate to people who had received income from offshore dividends or trusts, as opposed to earnings made in the UK and stashed in offshore accounts.

Mr Osborne hopes that the stringent measures will raise £4bn in currently unpaid tax within the next five years.  The UK has recovered £1.5bn from offshore tax evaders over the past two years, as the government has led the way in tackling the problem using changes set out by the Organisation for Economic Cooperation and Development.  But according to the Chancellor, “There is still a lot more money owed in tax that remains unpaid.”  According to official figures, an additional £1bn was lost in tax in the United Kingdom as a direct result of evasion during 2011/12, totalling £35bn.

In reality, will these measures make a considerable difference?

HMRC will be able to access UK residents’ bank accounts in 44 countries when the first information on suspected tax evaders is released in 2016, and is hoping to see immediate results.

To my mind, the change in law will act as a strong deterrent to possible offenders, as long as the new regulations remain in place, and are not ‘diluted’ at a later stage when the initial shock introduction has passed.  However the fact that people could be put in prison for tax avoidance simply because they were unaware or perhaps ignorant of the law, could have serious ramifications.

The government is therefore urging people with offshore accounts containing undeclared income to come forward sooner rather than later, or suffer much stricter penalties if they are found to be guilty of tax evasion.  According to Mr Osborne, “The message will be clear now with this new criminal offence that if you’re evading tax offshore, there is no safe haven and we will find you.”

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Mike Coady
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