A new information-exchange agreement has been put in place between Jersey and the UK as part of an effort to crack down on offshore tax evaders. The agreement, signed last week, in effect means that HM Revenue and Customs can go direct to the Jersey tax authorities for information on accounts in trusts and Jersey-based subsidiaries of UK companies.
"This is a significant breakthrough," said Joe Quinn at law firm McGrigors. "The long arm of the UK now stretches to the Channel Islands. Any UK taxpayer with offshore financial connections should now take urgent advice to establish whether they could be subject to an investigation in the UK," he warns.
The UK already has similar agreements with Guernsey and the Isle of Man, and in 2007 the first "Offshore Disclosure Facility" operated by the HMRC identified 100,000 accounts with links to UK tax irregularities. At that time, 64,000 taxpayers came forward and owned up to the tax they owed under the incentive of a fixed 10 per cent penalty "tax amnesty". Plans for another reduced penalty this year for taxpayers with irregularities were announced in the pre-Budget report.