Thursday, November 24, 2011
A new specialist unit targeting those with undeclared offshore income has been launched by the UK tax authority, HM Revenue and Customs (HMRC).
According to HMRC, the Offshore Co-Ordination Unit (OCU) brings together a team of offshore analysts, technical tax experts and experienced investigators, who will oversee and co-ordinate HMRCís compliance work to identify and pursue those with undecalred income and capital in offshore accounts.
This is the first instalment of 100 new offshore investigators announced by Chief Secretary to the Treasury, Danny Alexander, in September. According to HMRC, the unit will look to fully exploit the increasing amount of offshore information at HMRCís disposal, including bank account data.
The OCU will continue to build on the success of HMRCís Liechtenstein Disclosure Facility (LDF). The LDF allows those with unpaid tax linked to investments or assets in Liechtenstein to settle their tax liability with the UK. Such taxpayers must disclose information relating to the period from April, 1999.
The OCU will also implement the operational aspects of the recently signed tax agreement between Switzerland and the UK, which the Treasury expects will raise billions of pounds for the UK. The deal, once implemented in 2013, will permit UK residents to retrospectively pay tax on existing bank relationships in Switzerland, either by making a one-off tax payment or by making a full disclosure of their banking affairs to UK authorities.
Tax will be charged at a rate between 19% and 34%, dependent on the assets in question and determined by both the duration of the client-bank relationship and the initial and final amount of capital held in the account. A final withholding tax will be levied on any future investment income and capital gains of UK bank clients in Switzerland, at 48% on investment income, and 27% on capital gains. The deal also allows the UK to submit up to 500 information requests to Swiss authorities a year, with the aim of preventing the future deposit of undeclared funds.