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Guest Blog - Ormerod Rutter Accountants


 

International tax authorities closing in on tax evaders

Tax evaders are running out of hiding places as international tax authorities begin to take a tougher approach. In the UK, time is also running out for those with undeclared offshore assets to put their affairs right.

 

In a surprise announcement in the March Budget, Chancellor George Osborne announced that the Liechtenstein Disclosure Facility (LDF) will come to an end in December this year. The LDF is a unique opportunity enabling British taxpayers generous settlement terms on any undisclosed tax liabilities held in offshore bank accounts. One of the main benefits of the LDF is immunity from criminal prosecution for the tax offence for those who make a voluntary disclosure.

 

Although the LDF will be replaced by a short-term disclosure facility, the penalties will be harsher and will not include immunity from prosecution. With the LDF coming to an end, time is running out for taxpayers who need to make a disclosure.

 

From 2017, the squeeze on international tax evasion will become even tougher. Many governments around the world have agreed to an Automatic Exchange of Information (AEOI) – an initiative which will allow taxpayer’s information to be automatically exchanged between international tax authorities each year.

 

Currently, tax authorities can only request this information if they are certain that someone is evading tax. However, from 2017 onwards they will have automatic access to account balances, interest details, dividends and sales, proceeds from financial assets and other financial information – whether the taxpayer has paid their taxes or not. More governments are set to join the initiative in the future too.

 

Financial institutions (such as banks and accountants) in participating countries will have a legal obligation to annually report information to their local tax authorities, which will then be passed to the tax authorities where the account holder is resident.

 

If someone has deposited funds in an undeclared overseas account and the details of that account are reported to the UK tax authorities, it is likely that a tax investigation will follow.

 

Tax authorities around the world are clearly working together to close the net on tax evaders. Automatic exchange of information should cause no concern for taxpayers whose affairs are completely transparent, but if there are any irregularities it is essential that you come forward now.

 

Acting before December 2015 means that you can take advantage of the LDF and bring your affairs up to date under the best possible terms, before information starts to arrive from AEOI.

 

Anyone considering making a disclosure using the LDF, or the subsequent disclosure facility that will take its place, should seek professional advice.

Ormerod Rutter are happy to offer a free initial consultation to discuss in more detail.

 

For more information about Ormerod Rutter Accountants please visit their website www.ormerodrutter.co.uk 

Added: 14 Oct 2015 12:28


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