Anyone with undeclared offshore tax liabilities is being urged to come forward and pay what they owe or face prosecution, under new rules announced by the government recently. However it should stressed that this new criminal offence of failing to declare taxable offshore income and gains is subject to consultation and is not yet in legislation.

The consultation seeks views on the design of the new offence and on what the appropriate safeguards should be. The majority of offshore cases will continue to be dealt with through a civil approach. A further consultation paper sets out the government’s plans to introduce tougher civil sanctions for offshore evaders, including those who move their taxable assets between offshore banks in different countries in an attempt to hide their wealth and evade tax.

The consultation examines the situation where an individual moves their assets from one offshore centre which has tightened its tax-information-sharing laws to another which hasn’t. The 20-year rule limiting how far back HMRC can look at a taxpayer’s affairs could also be suspended.

The two consultation papers have been published on the GOV.UK website and are entitled ‘Tackling offshore tax evasion: A new criminal offence’ and ‘Tackling offshore tax evasion: Strengthening civil deterrents’. Both consultation periods end on 31 October 2014.