The Hollywood blockbuster, 'The Wolf of Wall Street', has reinvigorated the debate over tax evasion and avoidance. A number of tax commentators are predicting a tough year ahead in terms of tax investigations and disputes. In this continuingly changing environment, HM Revenue & Customs (HMRC) has a definite strategy to pursue tax evasion, contrived avoidance and general non-compliance with finances held offshore coming under particular scrutiny.

So how should individuals and businesses keep on top of this changing environment?

Be aware

A lot has changed since the 1990s. The film shows Leonardo DiCaprio able to deceive and out-manoeuvre the (US) investigators with apparent ease, whether they are looking at his business or personal finances, But today, there is a wide-ranging exchange of information between financial institutions, supported by a worldwide clampdown on unpaid tax. Countries across the globe are signing up to the new model of international tax co-operation based on the automatic exchange of information between their respective tax offices.

There is no such thing as a 'safe haven'

The days of money travelling overseas in suitcases stuffed with cash, to what were known scathingly as 'tax havens' as portrayed in the film are long gone. However, tax fraudsters will always try to find ways to move money to places they consider 'safe' from the taxman. But these days, 'tax havens' do not exist – the net is closing!

HMRC has smart technology and uses it!

Despite HMRC obtaining very large volumes of information, it can assess it very successfully using 'state of the art' data analytical software.

This software, called 'Connect', is a very powerful tool that analyses and matches the detail so that HMRC ensures good data is fed into the system including details on offshore investments from the recently signed exchange of information agreements with the UK Dependencies and Territories. Importantly, Jersey, Guernsey and the Isle of Man will be major contributors to this data set.

Information is power as far as HMRC is concerned. Undoubtedly, recent budgets have concentrated on bringing information to HMRC from home and abroad to facilitate its pursuit of unpaid taxes. Likewise it is also trying to encourage the voluntary disclosure of tax fraud or failed tax avoidance by introducing a number of favourable disclosure facilities. Importantly, there can be benefits for those who volunteer information before being challenged.

Get specialist advice

Many people are genuinely uncertain as to their tax position so the clearest advice if you have any doubt as to whether you have a disclosure to make is to contact a specialist tax adviser. They will be able to offer you a professional view on your situation and the old saying of "it's better to be safe than sorry" is certainly very appropriate.

Returning to the film, Mr Belfort's lifestyle caught up with him and he went to jail. Penalties for evasion vary, but they're tough.

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.