THE CHANCELLOR has continued his fight against tax avoidance and evasion in announcing that information exchange agreements had been reached with Crown dependencies.
Jersey has become the latest offshore jurisdiction to sign an automatic information-sharing deal with the UK, swiftly following the Isle of Man and Guernsey, which struck deals earlier this month.
Like Guernsey, it is expected the Jersey accord will closely follow the Isle of Man’s deal. Under that agreement, UK residents with assets concealed on the island will have until September 2016 to disclose details to the taxman and pay any tax owed to the HMRC, as well as a fine between 10% and 20%. While in most cases, the deal will see evaders escape prosecution, HMRC offers no guarantees.
Unlike a similar deal with Switzerland, anonymity will not be enshrined, while the deal will not have the immunity from criminal prosecution seen in the Liechtenstein Disclosure Facility. The UK received its first payment from Switzerland, amounting to £340m in January.
The net looks set to be cast wider, too, with an announcement that discussions are already underway with other unnamed overseas territories -measures the government expects will offset the drop in the 50p rate to 45p “many times over”.
George Osborne also turned his attention to promoters of avoidance schemes, promising to produce a consultation on “naming and shaming” those marketing avoidance schemes. A similar measure is already in place for those engaging in evasion.
The tax affairs of multinationals were again on the agenda, with Osborne pledging the government would use its membership of the G20 and OECD to ensure they “pay their fair share of tax”.
Ian Fleming, managing director of M&A tax at Alvarez & Marsal, said: “It’s good to see that pure tax avoidance has been addressed. It would be dangerous for the government to go it alone in tackling multinationals’ avoidance, which could have harmed the UK’s now very competitive tax system, so it is sensible to push for international agreement via the OECD.”