New Global Onslaught To Tackle Offshore Tax Shelters

Only days after finance ministers of the elite G20 developed nations agreed to back a global tax information swapping network, two nations have stepped up efforts to root out tax payers sheltering their cash offshore.

In Britain, Chancellor George Osborne is sending tax sleuths after the wealthy he accuses of hiding money in offshore banks and tax havens.

While in Canada, cash rewards are on offer for informants tipping off the government about suspected tax dodgers.

Meanwhile, the US is already tightening rules for taxpayers with money and investments offshore under the controversial FATCA rules, which are due to start on July 1.

The moves to find secret offshore money come after the G20 agreed to adapt a new global tax standard. More than 40 countries have already signed up to the standard and agreed to automatically swap information on the financial affairs of foreign nationals with each other.

Fines and penalties

In the UK, the Chancellor is threatening penalties of up to 200% the amount of tax sheltered offshore plus interest and fines for failing to declare the money.

“The UK government is on the side of the hardworking majority of people and companies who pay the tax they owe,” said Jennie Granger, HMRC’s Director General for Enforcement and Compliance.

“By taking global action to reform the system alongside a tough approach to enforcing the law at home, we will close the net on those who think they do not have to play by the rules.”

Britain’s tax campaign was announced at the meeting of G20 finance ministers in Sydney, Australia, over the weekend. The ministers signed up to bringing in new rules for multinational companies accused of shuffling money around the world to avoid paying tax on their profits.

Whistleblower rewards

They also agreed to implement tax information sharing between governments.

Osborne said: “Many with offshore assets do the right thing and tell HMRC about them, and have nothing to worry about. The minority who don’t must understand the net is closing around them.

“We are getting more and more information that helps us to target offshore tax cheats more effectively. If you have undeclared assets offshore you need to get in touch with HMRC urgently.”

Whistleblowers in Canada can apply for discretionary rewards when £55,000 of federal tax is recovered. Mandatory rewards will be paid when the amount of tax in dispute is more than £1 million.

Rewards will range from 5% to 15% of the tax recovered.

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