HM Revenue and Customs (HMRC) confirmed today that it is working with the United States and Australian tax administrations (the IRS and ATO) on data which reveals extensive use of complex offshore structures to conceal assets by wealthy individuals and companies.

The 400 gigabytes of data is still being analysed but early results show the use of companies and trusts in a number of territories around the world including Singapore, the British Virgin Islands, the Cayman Islands, and the Cook Islands. The data also exposes information that may be shared with other tax administrations as part of the global fight against tax evasion.

So far HMRC has identified over 100 people who benefit from these structures and a number of those individuals had already been identified and are under investigation for offshore tax evasion. They have also identified more than 200 UK accountants, lawyers and other professional advisors who advise on setting up these structures who will also be scrutinised. UK residents who use these offshore structures should review their taxation arrangements, and seek advice if necessary, to ensure they are compliant with UK tax law. HMRC encourages voluntary compliance and early disclosure of tax irregularities. Failure to do so may result in a criminal prosecution or significant financial penalties and the possibility of their identity being published.

Chancellor of the Exchequer George Osborne said:

“The message is simple: if you evade tax, we’re coming after you. The Government has invested hundreds of millions of pounds to fund the fight against tax evasion, both at home and abroad. This data is another weapon in HMRC’s arsenal. Ahead of the UK’s presidency of the G8 this year, the Prime Minister has made it a key priority to drive an international effort to increase transparency and clamp down on tax avoidance and evasion. By working with our international partners in this way, we are again demonstrating our commitment to this work.”

Jennie Granger, HMRC Commissioner and Director General for Enforcement and Compliance said:

“Working with the international tax community to pursue offshore evasion is another important step in closing the net on tax evasion.

There is nothing illegal about an international structure, especially in a globally integrated economy and these arrangements may be perfectly legitimate and may already have been declared to HMRC. However they may involve tax evasion, avoidance or other serious offences by taxpayers. What has to stop is using offshore structures to illegally hide assets and income”.

Note: At TaxationWeb, we feel it appropriate to point out that, no matter how objectionable HMRC might find avoidance, it is entirely legal and not an offence. It is therefore entirely inappropriate to imply that it is.

Tax Credit customers are being reminded by HM Revenue & Customs (HMRC) that they must renew their claims by 31 July – or their payments might stop.

HMRC will start sending Tax Credit renewal packs to about 5.8 million people from this week until the end of June. They are urged to act as soon as they receive a renewal pack. More than 3.7 million claimants renewed by the deadline last year, 90 per cent of those who were required to renew their claim.

HMRC is also asking claimants to check the accuracy of the information in the pack, and may have to query some of it with employers.

Claimants must tell HMRC about any changes to their circumstances that they haven’t already reported, such as:

• changes to working hours
• childcare costs or
• pay*.

If asked, they must also provide details of the previous year’s income.

*The amount a claimant’s income can change before HMRC must be told – the income disregard – was reduced this April to £5,000.

Having the right documents available will help reduce mistakes when they are filling out the form or calling HMRC’s Tax Credits helpline. These documents would be, for example, payslips, end of year P60 forms and childcare payment details.

HMRC’s Director of Benefits and Credits, Nick Lodge, said:

“Our message to people is renew early, renew accurately and renew on time.

They should aim to renew their Tax Credits as soon as they receive a pack, and must check that their details are correct.

If claimants don’t renew claims before 31 July, their payments might stop.”

Universal Credit, which will take over all Tax Credit claims by 2017, will be introduced this year. It is therefore important that claimants ensure that the data held by HMRC about their claim is accurate.

Claimants can get help and information on Tax Credit renewals from Tax Credits or from the Tax Credits Helpline –  0345 300 3900