The FT reports that the number of people reporting their undeclared foreign assets to the UK tax authorities has increased by 22%. Why are people reporting more often?

People are not reporting voluntarily

What has forced them to do this in the last year? The Financial Times article says that:

  • The UK budget has allocated funds for the tax administration to hire an additional 5,000 people to check taxpayers;
  • the administration has sent out many more and more precisely targeted letters (a la, we see you now);
  • more and more information is coming from the CRS system, as more and more offshore jurisdictions have joined the CRS system (and a growing part of the public is aware of it); more than 120 countries have joined the system, including Switzerland, Bermuda, BVI, Cayman Islands.

What is CRS?

Most countries have joined the CRS system, which requires banks and other financial institutions to report annually to their tax authorities information about the bank accounts (year-end balance and balance) of individuals who are tax residents in other CRS member states. The tax authorities of the relevant country then forward this information to the tax authorities of the person’s country of tax residence. Here is a separate blog on CRS.

Read the full story by tax expert Jānis Taukačs here.