Holding undeclared income outside of the UK will become harder for Britons.
The Treasury has revealed plans to make it a criminal offence for Britons to keep undeclared income abroad. Hefty fines and even prison sentences could result.
At present, HM Revenue & Customs must prove that a person was trying to hide money from the authorities.
But the Chancellor of the Exchequer will change the “burden of proof” to the individual who must prove that such funds were not being kept out of the taxman’s reach.
Mr Osborne said aggressive tax avoidance or evasion has deprived the Treasury of a “considerable” amount of money. He said the proposed legislation is a “significant new weapon” in the Government’s fight against tax evasion.
“It is totally unacceptable for people not to pay the tax that is due, and the message will be clear now with this new criminal offence that if you’re evading tax offshore, there is no safe haven and we will find you,” he said.
A Treasury spokesperson said the new law would cover income generated from offshore dividends and investment trusts, rather than income earned in Britain and then placed in offshore tax havens.
Official figures indicate that £35 billion for tax year 2011-12 was lost through non-payment. According to HMRC, £1.5 billion has been recovered from offshore tax evaders over the past two years.
More than 40 countries have agreed to share information on financial accounts and HMRC has contacted more than 20,000 people about their offshore assets since January 2013. A recent deal between the UK and Switzerland, however, has brought in significantly less revenue than the £5 billion estimated by the Treasury.
The proposal, which could come into effect next year, is part of a new strategy to tackle tax evasion.
