H M Revenue & Customs (HMR&C) has recently confirmed that it is working alongside the United States and Australian tax administrations (the IRS and ATO) on data which reveals extensive use of complex offshore structures, which HMR&C believes are being used to conceal assets by wealthy individuals and companies and to avoid taxation in the UK.
The data is still being analysed but early results reveal the use of companies and trusts in a number of territories around the world including Singapore, the British Virgin Islands, the Cayman Islands and the Cook Islands to shelter profits and gains from taxation.
The data also exposes information that may be shared with other tax administrations as part of the global fight against tax evasion.
So far, HMR&C has already identified more than 100 people with UK tax residence who benefit from such structures and a number of those individuals will be investigated in respect of offshore tax evasion with criminal prosecution a possibility in some cases.
HMR&C has also identified more than 200 UK accountants, lawyers and other professional advisers who set up these structures for clients and who will also be scrutinised.
HMR&C is encouraging those who have used offshore structures to review their taxation arrangements and seek advice, to ensure that they are compliant with UK tax law.
Voluntary disclosures of any tax irregularities can be made and failure to do so may result in a criminal prosecution, or significant financial penalties, with the possibility of identities being published.
There is nothing illegal about an international structure, especially in a globally integrated economy, and the arrangements entered into may be perfectly legitimate. However, this is not necessarily the view of HMR&C and the recent media hype demonizing perfectly legal arrangements stimulates the UK tax authorities to be vigorous in their pursuit of structures that are believed to have been engineered purely to evade UK tax.
If you need advice about any tax arrangements or structures you may have in place that could become a target please contact our ex-Revenue trained specialist team members for an initial, free, appraisal of your position.
Contact can be made as follows:-
Telephone: 0151 285 3100
Fax: 0151 285 3131
Email: [email protected]