UK Chancellor Alistair Darling’s pre-Budget report will have little impact on Guernsey, according to island tax experts.

Its standout aspect from a local perspective was an announcement of a 200% penalty for those failing to declare offshore bank accounts after a new disclosure opportunity deadline expires on 4 January.

The penalty was one of a number of deterrents and new tools revealed in a consultation document entitled Tackling Offshore Evasion published alongside yesterday’s pre-Budget report.

Mark Watson (pictured), tax director at PricewaterhouseCoopers, said in addition to a new category for offshore tax evasion with harsher penalties being created, UK residents would also be required to notify HMRC when opening a bank account in certain offshore jurisdictions.

‘UK residents taxed on the remittance basis would be excluded from the measures, though it is proposed that UK resident settlors of offshore trusts might be required to make disclosures on behalf of the trust. It is proposed that three different categories of offshore jurisdictions would be created, with different reporting requirements for each.

‘The Channel Islands will be expected to make representations that they should be included on the lowest category of disclosure and it is likely that there will be more discussion on this before the end of the consultation period on 3 March.’