FOR the first time, the UK appears to be differentiating between offshore centres that are making efforts to be transparent on tax and those that are not.

That is the view of KPMG tax partner Tony Mancini (pictured) following the release of the UK Budget this week, which outlined a proposed framework aimed at tackling evasion through offshore accounts.

The framework was first revealed in the pre-Budget report in December but has evolved following a consultation period and changed its proposed method of clamping down from one of notification when a UK resident opens an offshore bank account to one that focuses on non-compliance.

However, the interesting angle, according to Mr Mancini, was that the penalties for non-compliance would vary depending on the behaviour of the taxpayer and the ‘tax transparency’ of the jurisdiction where the bank account was held.

As it stands, penalties for deliberate understatement and concealment in jurisdictions with automatic exchange of information in place would be 100% of tax. For those with information exchange upon request it would be 150% of tax, while in jurisdictions that have no effective exchange provisions the penalties envisaged are 200% of tax.

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