Offshore Tax Investigation Identifies Over 100 Individuals Concealing Wealth

10 - 05 - 2013

A collaborative investigation by the UK, Australian and US tax authorities into offshore tax structures has uncovered more than 100 individuals concealing wealth in offshore havens, HMRC has announced.

Along with the Australian and US authorities, HMRC is trawling through 400 gigabytes of data (the equivalent of more than 200 lorry-loads of printed A4 sheets) which reveal the identities of those who may be involved, including the identities of professional accountants, lawyers and tax advisers.
HMRC has refused to reveal the source of the data but it is suspected to be the largest haul of tax evasion-related data obtained to date.
The unprecedented international hunt for tax evaders was prompted by an investigation by the BBC's Panorama programme, the Guardian newspaper and the Washington-based International Consortium of Investigative Journalists.
HMRC claim that a number of those identified as using offshore havens such as Singapore, the British Virgin Islands, the Cayman Islands, and the Cook Islands to hide their assets were already under investigation for tax evasion.
Tax evaders risk being fined the equivalent to 200% of the amount of tax they have evaded.

‘Another weapon in HMRC’s arsenal’

The Chancellor, George Osborne, has described the data at the heart of the investigation as ‘another weapon in HMRC’s arsenal’ and has warned tax evaders that HMRC is on their trail.
‘The message is simple: if you evade tax, we're coming after you,’ he said.
Director of the International Consortium of Investigative Journalists (ICIJ), Gerard Ryle, said that he anticipates that the joint three-country hunt would lead to ‘the largest tax investigation in history.’
‘We know from the data we obtained there are names of people from more than 170 countries. Some are prominent citizens – politicians, celebrities, businessmen, the elite of some societies,’ he added.

‘To have three major tax agencies collaborating – with the possibility of many more doing the same – is potentially a major blow to the secrecy of offshore jurisdictions.’

Tax evasion vs. tax avoidance
Head of taxation at the Association of Chartered Certified Accountants (ACCA), Chas Roy-Chowdhury, welcomed the move to clamp down on tax evasion but remarked that ‘There is a large gulf between what amounts to tax avoidance, which is within the law, and tax evasion, which is illegal.’

‘The majority of accountants, lawyers and other professional advisers, as well as their clients, are not breaking any laws in these locations,’ he added.
In order to comply with UK tax legislation, it is important to know the difference between the legal practices of tax avoidance and tax planning and the illegal practice of tax evasion.
According to HMRC, schemes that rely on ‘concealment or providing false information to us […] will amount to tax evasion and may attract serious sanctions, ranging from financial penalties to a criminal conviction.’
When it comes to managing your finances, you can never be too careful. While offshore tax schemes that promise to significantly reduce or write off your tax bill may seem tempting, they are often too good to be true. To avoid becoming entangled in an illegal tax scheme, it is advisable to research your professional advisers as thoroughly as possible, no matter where they are located.
Trust is paramount when dealing with professional advisers such as accountants, tax advisers and lawyers. At Foremans, we pride ourselves on delivering a person-centred, transparent and fully HMRC-compliant service. Regulated by the Institute of Chartered Accountants in England and Wales (ICAEW), you can rest assured that you are dealing with a trustworthy professional service firm. If you would like more information about our services or have any concerns over the legality of your tax arrangements, please do not hesitate to contact us on 01244 625 500 for impartial advice.







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