People who fail to declare offshore tax liabilities could face prosecution under proposed new laws published for consultation today.
HM Revenue & Customs has urged wealthy individuals to come forward and pay what they owe in advance of the new offence.
The consultation seeks views on the design of the new offence and on appropriate safeguards. HMRC said most offshore cases will continue to be dealt with through a civil approach.
However, a further consultation paper sets out the government’s plans to introduce tougher civil sanctions for offshore evaders, including those who move their taxable assets between offshore banks in different countries in an attempt to hide their wealth and evade tax.
The consultation examines the situation where an individual moves their assets from one offshore centre which has tightened its tax information-sharing laws to another which has not.
The 20-year rule limiting how far back HMRC can look at a taxpayer’s affairs could also be suspended.
Financial secretary to the Treasury David Gauke said: ‘The minority who use offshore secrecy to evade UK tax are making a big mistake. There is nothing wrong with holding assets offshore, but investors must pay the tax they owe here.’
Gauke said over 56,000 people have already told HMRC about what they owe offshore and they have been offered opportunities to clear things up as quickly and easily as possible.
‘Those that don’t come forward must face tough consequences, including a criminal conviction,’ he said.
Both consultations end on 31 October.