The government confirms its commitment to tackling tax evasion and increasing international tax transparency by the introduction of new rules on automatic exchange of information concerning, amongst other things, offshore accounts.

As announced as part of the pre-election 2015 Budget, the government will legislate to require financial intermediaries and tax advisers to notify their UK resident customers with UK or overseas accounts of the full impact of the Common Reporting Standard (CRS), the opportunities to disclose, and the penalties they could face for non-disclosure.

The Summer Finance Bill 2015 includes a power, with effect from Royal Assent, to make regulations achieving this.

The regulations are to stipulate that financial intermediaries, tax advisers and other professionals who may be aware of, or may have given advice about, an offshore account must notify their customers that:

  • the UK will begin to receive information on offshore accounts in 2017 and, at the same time, will begin to share information with other tax authorities on accounts held in the UK. This will allow HM Revenue & Customs and other tax authorities to check that the right amount of tax is being paid on money held abroad

  • HM Revenue & Customs will open a time-limited disclosure facility in early 2016 to allow non-compliant taxpayers to correct their tax affairs under certain terms before HM Revenue & Customs starts to receive data under the CRS. This new facility will be "on tougher terms" than the previous offshore disclosure facilities that HM Revenue & Customs has operated; and

  • if non-compliant taxpayers continue to conceal their tax affairs, HM Revenue & Customs will enforce tough penalties for offshore evasion through the existing offshore penalty regime, new civil penalties for tax evaders and the new criminal offence for failing to declare taxable offshore income and gains.

The regulations are to be made after Royal Assent is given to the Summer Finance Bill 2015, following informal consultation with financial institutions and tax advisers to develop targeted and cost-effective communications, and to ensure that the right people are involved in delivering the messages. The regulations are expected to have effect from early 2016.