Although full details have not been released, the Treasury has stated that under the Isle of Man Disclosure Facility, liabilities arising from April 1999 onwards must be fully disclosed and there will be a guaranteed penalty rate of 10 per cent for returns to be filed before April 2009 and 20 per cent thereafter.
The Isle of Man Disclosure Facility will not be available to those under enquiry by HMRC and there will be no guarantee against criminal investigation for tax related offences. Taxpayers who have previously been under investigation will not be able to benefit from the guaranteed penalty rates or start date.
Under the automatic exchange agreement, a wide range of financial information on UK taxpayers with accounts in the Isle of Man will be reported to HM Revenue & Customs automatically each year. It follows closely the UK-US agreement to Improve International Tax Compliance and to Implement FATCA in order to minimize burdens on financial institutions.
Chancellor of the Exchequer, George Osborne said: he Government is committed to tackling tax evasion and this agreement will greatly enhance HMRC ability to clamp down on those who try to hide their money offshore. I welcome the progress made with the Isle of Man and look forward to working on this new standard in the automatic exchange of tax information. Today agreement builds on the groundbreaking work we have already carried out the UK Government has signed agreements with the US and Switzerland so far and we are in discussions with Jersey and Guernsey as part of our common commitment to combat tax evasion.
Tax transparency will be a focus of the UK G8 presidency, where it will look to further promote automatic information exchange.
On 30 November 2012, Jersey and Guernsey released a joint statement stating that they were in discussions with HM Treasury on enhanced information exchange. On 1 January 2013, the Government agreement with Switzerland to recover previously unpaid UK tax on money hidden in Switzerland came into force.
On 29 January 2013, HMRC announced that it had received the first installment of £342million from the UK-Swiss agreement. The agreement is forecast to bring in over £5billion over the next six years.
