Edinburgh is tax avoidance hotspot
The capital is home to 145 people who have admitted underpaying tax from offshore investments last year - 30 per 100,000 population - making it the fourth worst city in the UK.
Top of the list was Slough, with 47 per 100,000 residents, closely followed by London with 39. Edinburgh is the only location in the Top five which is not in the Home Counties in England. The UK average was 17.
No other Scottish cities made the top 20.
Accountancy group UHY Hacker Young said the top areas for admitting underpaid tax tend to be wealthy and home to highly paid individuals who work in sectors such as financial services or IT. These individuals are likely to fall into higher income tax brackets and would, therefore, be tempted to keep more of their income or assets offshore.
Experts said that HMRC’s renewed focus on taxpayers’ offshore interests may have prompted more individuals to come forward over the last year. If a taxpayer comes forward then HMRC is likely to be more lenient when issuing penalties.
The tax authority has been ramping up its activities targeting hidden offshore assets of UK taxpayers, with its specialist ‘Offshore, Corporate and Wealthy’ team launching over 820 investigations last year.
Colin Wright, chairman of UHY Hacker Young group, said: “HMRC’s crackdown on taxpayers offshore is prompting more individuals in Edinburgh to come in from the cold and make a voluntary disclosure.
“The growing resources at HMRC’s disposal means there is nowhere to hide for taxpayers with undeclared offshore interests. It, therefore, makes a lot of financial sense to make a disclosure as this can reduce penalties from up to 200 per cent of unpaid tax to less than 100 per cent.”
He added: “HMRC does not discriminate and will come down hard on all taxpayers with undeclared offshore interests – even if an error on a tax return arises from a genuine mistake. It is therefore important that taxpayers keep their affairs up to date.”
“Making a disclosure it almost always the best way to deal with an irregular tax position but it’s important to seek professional advice before doing so in order to get the best possible settlement.”