UK Government and HMRC Announce Crack Down on Tax Evasion
UK Government and HMRC Crack Down on Secret Bank Account Tax Evasion. Here, International Monetary Fund (IMF) Managing Director Christine Lagarde (L) chats with Osborne before the G20 round table meeting in Sydney.Reuters
Britain’s government and its taxman have announced the net is closing on people who are evading tax by holding cash in offshore accounts, with a new advertising campaign.
UK Chancellor George Osborne said that the campaign acts as a reminder that if people continually decide to hide money in secretive tax havens, such as Switzerland, “then we are coming after them”.
“Ultimately, this is about fairness,” said Osborne at a G20 meeting in Australia.
“People have to pay their taxes. [Authorities] are expecting to collect a significant amount of revenue but the challenge is finding out exactly what is hidden offshore”.
Jennie Granger, director general for enforcement and compliance of HM Revenue & Customs (HMRC), added that most people with offshore assets “do the right thing and tell us about them but “for the minority who do not, the net is closing around them”.
Switzerland is thought to have attracted more than £1.3tn (€1.5tn, $2tn) in offshore deposits and has come under close scrutiny over the last few years.
However, after years of negotiations, the Swiss government backed a variety of global schemes to provide more transparency over its clients and banking activities, in a bid to help authorities root out billions of dollars of tax.
In June last year, World leaders at the G8 summit in Northern Ireland chalked up an agreement on tackling tax avoidance and evasion.
“Private enterprise drives growth, reduces poverty, and creates jobs and prosperity for people around the world,” said the summit delegates in the Lough Erne Declaration.
“Governments have a special responsibility to make proper rules and promote good governance. Fair taxes, increased transparency and open trade are vital drivers of this.”
What is the Difference Between Tax Avoidance and Tax Evasion?
Tax avoidance is the legal way of reducing one’s tax bill by using a number of accounting methods to achieve this. Tax avoidance methods usually involve complicated ways in changing one’s business structure through incorporation, establishing an offshore company in a tax haven, or even deducting tax for materials or equipment use. The company also fully discloses this information to the tax authorities.
Tax evasion is an illegal way of reducing one’s tax bill. This involves deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability, and includes, in particular, dishonest tax reporting.
The Credit: The International Business Times