Offshore unit launched to tackle international tax avoidance

The new Offshore Coordination Unit (OCU) will employ offshore analysts, technical tax experts and experienced investigators to exploit the increasing amount of offshore information at HMRC's disposal, including data from bank accounts.

This information will then be used to develop ways of tackling offshore tax evasion, HMRC said.

David Gauke, Exchequer Secretary to the Treasury, said that the specialist unit would continue HMRC's recent work aimed at tackling offshore tax evasion.

"The days when untaxed income or capital could be safely salted away offshore, beyond the reaches of the taxman, are long gone," he said.

The OCU's first task will be to coordinate the investigation of 6,000 UK residents and organisations holding Swiss bank accounts with HSBC Geneva, the department said. Last month HMRC announced that account holders identified under a tax treaty will have a "window of opportunity" to disclose their tax liabilities before the department would begin its own investigations. The OCU will shortly begin writing to account holders who are not currently under investigation or have yet to come forward voluntarily, it said.

The UK Government recently formally ratified an agreement with Switzerland that it claims will raise "billions of pounds" for the Exchequer from 2013. Under the terms of the agreement Swiss banks will make an up-front payment to the UK as a "gesture of good faith" before a new withholding tax of 48% on investment income and 27% on gains for UK residents with funds in Swiss bank accounts comes into force. A new information-sharing provision will also make it easier for HMRC to find out about offshore accounts held by UK taxpayers.

The OCU will also coordinate HMRC's Liechtenstein Disclosure Facility (LDF), which will run until 31 March 2015. The LDF is a special arrangement allowing those with unpaid tax linked to assets in Liechtenstein to disclose and settle their tax liabilities.

Tax law specialist Chris Thomas of Pinsent Masons, the law firm behind Out-Law.com, said that offshore tax avoidance was clearly an attractive target given the desperate need to bolster public finances. He added that recent developments, such as the deal with Switzerland and the success of the LDF, were giving HMRC access to a great deal more information.

"The new resource will enable HMRC to process that data more effectively and target a larger number of taxpayers than they have been able to do so historically," he said.

"There is also little doubt that this arrangement is intended as a warning shot to taxpayers, to encourage them to come forward with voluntary disclosures."