Further action on tax evasion
Date: 18th March, 2013 | Author: Cathy Corns | Comments: 0
The UK and the Isle of Man governments have agreed an automatic information exchange procedure as well as a disclosure facility for UK taxpayers.
The automatic exchange agreement provides for a wide range of financial information on UK taxpayers with accounts in the Isle of Man to be automatically reported to HMRC every year.
The new Isle of Man disclosure facility encourages taxpayers to come forward rather than wait and face higher penalties if found out. However, the new facility is much less attractive than others in that it does not offer immunity from criminal prosecution. It excludes a wide range of taxpayers; in particular, those who have been under investigation by HMRC, and excludes taxpayers who have been involved with another disclosure facility or those subject to the UK/Swiss agreement.
The new facility only applies to UK tax resident individuals who have, or have had, a bank account in the Isle of Man between 6 April 1999 and 31 December 2013.
Under the facility, tax must be paid at the time of the application, unless HMRC agrees otherwise and the penalties payable under the facility are substantial; 10% to 40%.
Nevertheless, any UK taxpayers with undisclosed property (including bank accounts, annuity contracts and trusts) in the Isle of Man should act now as under the new information exchange agreement HMRC may well find out about them.
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