HM Revenue & Customs (HMRC) collected £122 million in extra tax from overseas assets in the 2018/19 tax year, following the introduction of the new Common Reporting Standard (CRS) tax regime.
The CRS rules mean that tax authorities in more than 100 countries share tax information with each other.
The figures were confirmed by the tax office, with experts believing that the CRS data will significantly enhance HMRC’s ability to identify offshore non-compliance of tax rules.
Financial institutions including banks, trusts, foundations, insurance companies, custodians and some investment entities are now required to report information under the new CRS rules.
In total, the CRS reported more than five million accounts to HMRC in 2018, in relation to approximately three million UK taxpayers who have offshore financial interests.
This reporting resulted in HMRC’s Offshore, Corporate and Wealthy unit identifying £560 million of additional tax due to be paid.
HMRC introduced a requirement to correct (RTC) rule last year, allowing taxpayers to declare and pay tax on their offshore interests prior to data being received from the overseas tax bodies. According to figures from HMRC, this led to 17,000 individuals declaring offshore tax in 2018.
Declarations that were made before the September 2018 deadline were treated more favourably than those who did not declare, while the failure to correct penalties are expected to be more severe than the current penalties, with a maximum penalty of 100 per cent of the tax involved.