The government's wider plans to combat tax avoidance has seen moves extended to Crown dependencies, with the Chancellor George Osborne announcing the introduction of automatic tax information exchange agreements (IEAs).
The agreements constitute the dependencies and overseas territories providing HMRC with details on potentially taxable income earned by UK residents.
Jersey, the Isle of Man and Guernsey have already entered into these agreements. Investors with accounts in these jurisdictions have the opportunity to settle these outstanding affairs before the exchange agreements kick in - HMRC hopes this will raise some £1bn as part of the £4.6bn that government expects to raise from overall anti-avoidance measures.
PwC tax partner Stephen Camm, tax partner - who was in Jersey on the day of the Budget - said that while there was agreement that the tax exchange agreement was inevitable, given agreements with other dependencies, there was a reluctance to acknowledge it was necessary.
'The general perception from people to the suggestion that HMRC would recover £1bn in the three UK dependencies is that it is wildly overestimated.
'However in my experience, over the last few years, it is clear there is business in the islands that does need still to be disclosed and it is quite difficult for trust companies and banks to truly know whether clients are disclosing everything,' said Camm.
He said finance institutions in Jersey are also unhappy about the expense of having to write to UK-resident clients to tell them about the end of the disclosure facility at the end of 2013 and 2016.
'They would like to see the government take over those communications,' he said.
There's also a nervousness that any sort of reporting regime will drive non-dom business away from islands.
'My view is that in the short to medium term, they have to learn to be less reliant on UK-resident non-dom business and become more adept at attracting business from other parts of the world, such as Africa and Latin America,' said Camm.
But Geoff Cook, chief executive of Jersey Finance, a representative body of the finance industry in the dependency, said he was confident that the UK didn't think evasion was a problem there.
'They estimate £1bn [will be recovered] over five years from three dependencies - that's an estimate £250m per year over three crown dependencies while funds and cash deposits in Jersey alone are worth £350bn,' said Cook.
His only concern, he said, related to the detail required with the reporting obligations.
'We're concerned that we might be asked to report at a level over and above what the UK requires of its own residents,' said Cook.
Osborne also confirmed the UK's would continue in its campaign to clamp down global avoidance, through the G20. The UK is chairing the G20 review committee on transfer pricing, as part of efforts to ensure multinationals pay their fair share in tax.
For the latest news and analysis on Budget 2013, click HERE
