New crackdown on offshore tax avoiders
A comprehensive data exchange network aimed at catching offshore tax avoiders is going live in September with over 100 countries participating in the information sharing.
The network, called the common reporting standard, lists more than 3,200 treaties between more than 100 countries that are taking part. They are all ready to start swapping data from September – and some have started already.
HMRC is gearing up a £3.2bn tax raid on tens of thousands of contractors who used offshore tax avoidance schemes.
The authorities estimate that 50,000 people engaged in schemes that allowed them to avoid paying income tax by using a complex structure involving loans from trusts based overseas.
The efforts by the British taxman will get an extra push once the data exchange network is in effect.
The common reporting standard is an agreement between tax authorities to notify each other about offshore accounts and investments held by offshore taxpayers living in foreign countries.
So, British taxpayers with bank accounts or investments held in Dubai or Abu Dhabi will have their personal and financial details logged with HMRC.
HMRC’s specialist investigation department, the offshore, corporate and wealthy unit, has opened 839 investigations into UK taxpayers, with assets in offshore tax havens over the past year, according to figures obtained by a Freedom of Information request by Pinsent Masons, the international law firm.