Osborne tipped to hit tax haven users

No longer will the taxman need to prove that a person’s intent for holding money offshore was to evade tax, under new criminal prosecution powers expected to be announced today.

Speaking at the weekend, George Osborne told reporters that he wanted to “change the balance of the law so the burden of proof” falls on any Briton whose income is in an offshore bank account.

It means that rather than HM Revenue & Customs having to prove that the intent of a person with an offshore account was to evade tax, it would be able to prosecute anyone with an undeclared foreign income.

The move by the chancellor stems from a series of tax cases that HMRC failed to win because it was unable to demonstrate that the British residents in question sent their funds abroad to escape liabilities.

As a result, and under the new criminal standard being proposed, the tax authority would in future only have to show that a person’s money is taxable and undeclared to bring them in scope of a prison sentence.

Currently, offshore tax evaders can be fined twice the amount they owe, but the chancellor also reportedly said the Revenue would consult on ways to strengthen such penalties while seeking to improve the incentives for those who help uncover untaxed offshore assets.

Mr Osborne’s comments, made to the Financial Times at the IMF conference in Washington, come as the second batch of HMRC letters to Britons with Swiss bank accounts are due to go out as a final payment demand next month.

UPDATE: As reported above, HMRC's proposals have been published -- in a document entitled No Safe Havens.

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