You’d either have to be living on the moon or have your head under a rock to avoid news stories involving accusations of tax evasion and tax avoidance in recent weeks and months.
Stories of Jimmy Carr using an aggressive offshore tax reduction scheme called K2 and the BBC allegedly forcing their staff to set up their own personal service companies have been rife in the media.
But one thing that has been widely missed is the fact that tax avoidance in itself is not illegal.
Indeed, if conducted in the right way, moving assets and finances to offshore jurisdiction to reduce your taxation liabilities is a perfectly legal move.
If, for example, your business has international dealings or you spend a large amount of the year working outside of the UK then it may make sense to open an account in another country.
Despite this, Martin Hesketh, managing director of Brookson, advises contractors with overseas accounts that they should still declare their funds to HM Revenue & Customs so to avoid being evasion and being fined 100 per cent of a tax due.
“High income contractors, with money invested in an offshore account, who have not disclosed this in their tax returns, may not have paid the correct amount of UK tax on interest earned and we would suggest they seek advice from a tax specialist,” he told Shout 99.
“Although there is nothing illegal about having an offshore account, there is an obligation for UK resident individuals to disclose sources of taxable income to HMRC as they will not tolerate ignorance of the law as an excuse so it’s vital that contractors are certain of their compliance status.”
Are you concerned?
If you are concerned about any of your offshore income coming under scrutiny, then it is best to seek out the services of a professional tax specialist, who will be able to provide you with confidential and impartial advice.
Brookson can offer a free tax health check who can help you with such. For more information on this please visit our Tax Health Check page on our website.