The Government is to sign a tax information sharing agreement with the Isle of Man which will provide HM Revenue & Customs (HMRC) with a range of additional information about potentially taxable income in Manx bank accounts. This is part of a package of measures being developed by the UK and the Isle of Man as part of a shared commitment to combat tax evasion.
Under the enhanced information exchange agreement, the UK and Isle of Man will automatically exchange a wide range of information on tax residents, on a reciprocal basis. To minimise burdens on financial institutions the agreement will follow, as closely as practicable, the UK-US Agreement to Improve International Tax Compliance and to Implement FATCA. The agreement will be concluded to the same timetable as the agreement currently being negotiated between the Isle of Man and the United States.
Exchequer Secretary to the Treasury, David Gauke said:
This agreement will significantly boost the UK’s ability to tackle cross-border tax evasion. Automatic information exchange is an important tool in boosting HMRC’s ability to clamp down on those who seek to hide their money overseas. Our ground breaking agreement with the US sets a new standard in international tax transparency and today’s agreement between the UK and Isle of Man to move to much greater levels of automatic exchange is the next step in this process.
For years people said this couldn’t be done, so I welcome the progress we have made so far with the Isle of Man. We are looking to reach similar agreements with other jurisdictions and are in discussions with Jersey and Guernsey about enhanced information exchange as part of our common commitment to combat tax evasion.
Details of the necessary operational and implementation requirements are still being discussed and will be announced in due course.
When combined with HMRC’s new centre of excellence in offshore evasion and the development of a comprehensive strategy to tackle it, HMRC will be well placed to clamp down even harder on those who evade tax by hiding their money offshore.
Notes for Editors
FATCA, which is part of the US Hiring Incentives to Restore Employment Act of 2010, aims to combat tax evasion by US tax residents using foreign accounts. It includes certain provisions on withholding taxes and on the reporting of information by foreign financial institutions for US tax compliance purposes.
In July 2012, the G5 issued a Joint Statement regarding an intergovernmental approach to FATCA and the publication of the Model Intergovernmental Agreement.
In September 2012, the Government signed an agreement with the US to implement FATCA and significantly increase the amount of information on potentially taxable income automatically exchanged by the two countries.
On 30 November 2012, Jersey and Guernsey released a joint statement stating that they are in discussions with HM Treasury on enhanced information exchange.
On 5 December 2012, the Autumn Statement confirmed that the Government’s agreement with Switzerland to recover previously unpaid UK tax on money hidden in Switzerland is forecast to bring in over £5 billion over the next six years. The agreement is due to come into force on 1 January 2013.