HMRC pledges 'further, targeted activity' on tax evasion following raid on financial firm

HMRC is conducting the investigation jointly with authorities in the Netherlands, Australia, Germany and France. It is focused on the activities of the unnamed institution, some of its senior employees and "a number of its customers", according to a statement by the tax department.

"HMRC has shows its willingness to flex its muscles – and is not even waiting for the new corporate offence to come in," said tax expert Jason Collins of Pinsent Masons, the law firm behind Out-Law.com. "All banks need to prepare for being the next one – especially those with Swiss operations, where the only amnesty given under the Swiss-UK agreement by HMRC was to Swiss bankers, not anyone in the UK who may have had some involvement."

The Criminal Finances Bill, which is currently before the UK parliament, will introduce a new corporate criminal offence for businesses that fail to put in place reasonable procedures to prevent the facilitation of tax evasion by their employees and representatives. The new offence is expected to come into force in September 2017 and will apply to non-UK based, as well as UK based, corporations and partnerships which fail to prevent their representatives from criminally facilitating a UK tax loss. It will also catch UK-based entities which fail to prevent their representatives from criminally facilitating a tax loss overseas.

This week, the House of Lords is considering a number of amendments to the bill. These include proposals for a 'corporate probation order', which would be issued to companies convicted of a criminal offence of failing to prevent tax evasion.

The new criminal offence is the latest "game changing" policy announced by the UK government to tackle offshore tax evasion. Last year, HMRC collected a "record-breaking" £26 billion in tax that would otherwise have gone unpaid, and the department's 'Customer Compliance Fraud Investigation Service' is currently investigating more than 1,100 cases of offshore evasion around the world, it said in a statement.

The government also intends to introduce new legal sanctions for individual taxpayers who have not declared the right amount of UK tax in respect of offshore interests on or before 5 April 2017. Taxpayers that 'fail to correct' their position before 30 September 2018, when the international Common Reporting Standard (CRS) on tax information exchange comes into full force, could be liable for minimum penalties of 100% of the unpaid tax.

The international criminal investigation is being co-ordinated by Eurojust, an EU agency based in The Hague, at the request of the Dutch Public Prosecution Service. In a statement, Eurojust said that arrests had been made, suspects questions and searches and seizures carried out in the countries involved.

"The undeclared assets hidden within offshore accounts and policies are estimated in the millions of euros," Eurojust said in a statement.

"The international reach of this investigation sends a clear message that there is no hiding place for those seeking to evade tax," HMRC said in a statement. "Promoters and facilitators of tax evasion schemes, and their customers, need to wake up to reality and accept that attempting to hide wealth overseas, or within institutions, doesn't work and doesn’t place them out of our reach."