Report identifies £400m of under-declared tax from offshore income

In 2018-19 UK residents under-declared tax of £400m on offshore income according to new analysis from HMRC. The undisclosed foreign income report estimated that 16% of individuals with foreign income had not paid the correct tax.

The report used data obtained through automatic exchange of information (AEOI) agreements with other countries.

In 2018 HMRC received notifications of more than seven million accounts through AEOI which were owned by 3.9 million individuals. Of these 3.2 million (82%) were individuals traceable to an HMRC record but 721 000 account holders were untraced.

Within the group of ‘traced’ individuals 700 000 had discrepancies between the data and their self-assessment tax returns. After checking a sample of 400 individuals with discrepancies to assess the extent of non-compliance HMRC found that only 16 were non-compliant with 2% estimated to have underdeclared tax...