George Osborne during the IMF/World Bank 2014 Spring Meetings in Washington Photograph: Joshua Roberts/Reuters
- Chancellor wants to make it easier to impose fines and jail terms on tax avoiders exploiting offshore havens
By Phillip Inman
12 April 2014
George Osborne is planning to make it easier to impose jail terms or heavy fines on British residents using offshore tax havens to cheat the exchequer out of billions in revenue.
The chancellor, who is in Washington at the International Monetary Fund's spring meeting, has drafted a criminal offence of failing to declare offshore income as he steps up a long-running campaign to crack down on tax dodging.
At present, HMRC has to prove a British resident has deliberately sent funds abroad to dodge tax. The need to prove intent has undermined several prosecutions and allowed those under investigation to escape with only light fines, Treasury officials said.
HMRC estimates £5bn a year is lost to the exchequer from tax evasion by wealthy individuals, out of a £35bn overall loss to evasion and non-payment.
"It is totally unacceptable for people not to pay tax that is due in the UK," Osborne said between meetings at the IMF spring conference. "The vast majority of wealthy people pay their taxes and their share of tax income has been going up. HMRC believes it has been difficult getting the outright tax evader."
The UK government is working with 50 other countries in a pilot project to share information about potential tax avoiders. The project is co-ordinated by the Organisation for Economic Co-operation and Development, which has laid out rules for information sharing between governments on potential tax dodgers.