UK to renew attack on offshore tax evasion
LONDON — The UK renewed its attack against offshore tax evasion with plans to publish a new compliance strategy around the overseas entities that wealthy individuals use to conceal their assets.
The move “will build on the substantial progress the UK has made in tackling offshore tax evasion” since the government launched its last plan in 2014, the UK Treasury said yesterday as part of its 2018 budget.
Fighting offshore tax evasion has increasingly become a priority for governments in the wake of public data leaks such as the Panama Papers. Almost half of the companies cited through that leak of 11.5 million documents were registered in the British Virgin Islands, a UK overseas territory. In addition, the Panama Papers cited almost 2,000 UK-based intermediaries that helped individuals or entities to evade tax.
More than 100 nations received unprecedented levels of financial data last month on their overseas residents through an initiative, led by the Organisation for Economic Cooperation and Development, to target individuals evading taxes.
The UK was early to embrace the measure, known as the Common Reporting Standard, voluntarily adopting it a year before it took full effect last month. Bermuda has also adopted CRS.
“Offshore evasion is illegal and harmful,” the UK’s tax agency said in a 2014 strategy paper on the matter. “It is unfair that those who can afford to use expensive offshore banks and complex financial structures can evade their responsibility to pay the taxes which fund vital public services.”