This is hardly surprising given recent focus on tax avoidance by the Media and the UK Government. Having stirred up public sentiment against those that are "not paying their fair share", we are now seeing measures such as naming and shaming of both users and promoters of tax avoidance schemes. The distinction between legal tax avoidance and illegal tax evasion can no longer be seen as the divide between what is acceptable behaviour and what crosses the line - the line has moved.
The UK is leading the charge on international automatic information exchange, and the announcement today in the Budget that agreement on an IGA has been reached with all three Crown Dependencies is an important step for the UK towards this cause. Cayman has also announced today that it will enter into a UK IGA. The spotlight on tax evasion has not been limited to the UK but can be seen in other higher tax jurisdictions, and the idea that automatic information exchange will quickly become the international standard looks very credible.
Alongside the UK IGA is a disclosure facility. The UK expect to raise a startling £1 billion from the Jersey, Guernsey and Isle Of Man disclosure facilities over the next 5 years. Given the Lichtenstein disclosure facility (with more generous terms) raised only £140 million in its first 2 years, and in light of the fact that the three Crown Dependencies are highly regulated, this target looks highly ambitious. Perhaps in time the failure of the Jersey, Guernsey and Isle Of Man facilities to raise significant amounts will finally dislodge the perception of the Islands as tax havens.
If you would like any further information or clarification on any of the measures announced, please do not hesitate to contact a member of our Budget working party whose details appear alongside.