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Offshore account-holders beware: the taxman comes!

The Treasury is coming for you if you’ve been ferreting cash away overseas in an offshore account thanks to new tax avoidance measures that went live recently.

It hasn’t been long since the Government unveiled its newest plan to crack down on tax avoidance and tax evasion, especially on those who decide to hide their cash overseas, but it’s already shaken the pillars of heaven. The new rules will turn any Brit using an offshore account to hold undeclared income a criminal, and this is going to make it a lot easier for Her Majesty’s Revenue & Customs to nail offenders to the wall as a result.

In fact, HMRC right now can’t even get a conviction unless it can prove you were putting your money away expressly to hide it from the taxman. Meanwhile the new regulations will shift the onus to the taxpayer instead of HMRC; in other words anyone accused of tax avoidance has to prove why their actions don’t actually constitute illegal activity.

Of course, this has some serious ramifications for the contracting community as always. Freelancers and contract workers have been much maligned by the Treasury of late, what with the renewed interest in stamping out tax avoidance and the fact that many individuals like to falsely masquerade as self-employed to reduce their tax burden; however, with more scrutiny being placed on offshore accounts instead of whether or not a freelancer is actually not an employee of the companies he works for this could signal the beginning of the turning tide away from wrongly accusing contractors.

Then again, it’s still much too early to say for sure whether or not this indicates a sea change in the way the Treasury is going to handle tax avoidance and tax evasion in the future. Any Brit with an offshore account is going to have to answer some rather hard questions though and that kind of tickles me a bit. I’m quite keen to see who ends up having to do a bit of tap-dancing when the taxman comes a-knocking; despite everything I still have my suspicions that the biggest perpetrators – high-profile multinational corporations – aren’t going to be reined in any time soon.

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