New clampdown on tax dodgers
The Chancellor of the Exchequer, George Osborne, and the Chief Secretary to the Treasury, Danny Alexander, have today announced new action to clamp down on tax dodgers.
The action comes ahead of the Chancellor's Autumn Statement on Wednesday.
It includes:
• New £77m funding for HM Revenue & Customs (HMRC) in this Spending Review period to expand their anti-avoidance and evasion activity, specifically those focusing on offshore evasion and avoidance by wealthy individuals and by multinationals. This is expected to bring in an additional £2bn per year in tax that would have otherwise gone unpaid.
• A groundbreaking agreement with the US, the first of its kind anywhere, that will significantly increase the amount of information on potentially taxable income automatically exchanged between both countries and further enhance HMRC's ability to tackle offshore evasion. This sets a new standard in international tax transparency aimed at tackling tax evasion and the Government will look to conclude similar agreements with other jurisdictions.
• Steps to close the net on the marketers of aggressive tax avoidance schemes, including the introduction of new information disclosure rules and HMRC sanctions for the 'cowboy' advisers who sell such schemes.
HMRC is also publishing Closing in on Tax Evasion: HMRC's approach, which sets out HMRC's current approach to tax evasion, particularly their use of third party data. Building on this work and a new 'centre of excellence' for offshore evasion within HMRC, the department will develop a comprehensive strategy for tackling offshore evasion to be published in spring 2013.
Mr Alexander said: "In restoring the public finances, our first priority must be to tackle those who avoid or evade tax. It is simply not fair that at a time when most people are making a contribution to balancing the nation's books, there is a small minority of taxpayers who try to escape their responsibility. We are therefore investing additional resources into the department so that it can step up its fight against tax dodgers and bring in an extra £2bn per year by 2014/15."
The Government is also today announcing steps to move against 'cowboy' tax advisers who sell contrived and aggressive tax avoidance schemes to tax dodgers. Following a consultation over the summer on this issue, the Government will:
• Consult on proposals to introduce significant new information disclosure and penalty powers to make it more difficult for the marketers of abusive schemes to continue to promote them in the future.
• Strengthen the existing Disclosure of Tax Avoidance Schemes (DOTAS) regime in order to improve the information HMRC obtains about avoidance schemes and the people who use them and widen the range of schemes required to be disclosed. The Government will legislate in 2013 to extend the range of information that must be disclosed to HMRC and impose additional sanctions for non-compliance.
The Chancellor will announce further action to close specific tax avoidance loopholes on Wednesday when setting out his Autumn Statement.