2010 is set to be significant year for the respective banking industries of many countries around the world. In the UK customers look set to find the best savings deals, and banks are predicted to make moves to re-establish trust with savers more eager to switch to new accounts and new providers. So how is the offshore savings sector likely to change?
For savers in the UK, the Bank of England base rate looks likely to remain at the historically low 0.5 percent for a good few months yet, with some even predicting that it’ll stick around for the entire year. Consequently, more and more savers looking to get the most from their savings may be enticed by offshore interest rates which are proving to be higher.
Yet it is not just promising rates which looks to benefit the offshore sector, 2010 is also seeing something of a new era of transparency demanded of those with offshore accounts. HM Revenue&Customs have called for offshore savers to notify them of their offshore accounts if they have not already done so in order to cut down on the number of UK residents expected to be using offshore accounts to evade tax illegally.
Those who have not notified the HMRC by 4th January now face the risk of investigation and penalties up to 100 percent – whilst those who have notified have until the 12th March to pay back any tax owed.
However, this new era of transparency is causing many offshore financial centres to make significant changes also. In order to ensure that certain countries are honest with their tax practices, in 2008 the Organisation for Economic Co-operation and Development (OECD) drew up a blacklist of potentially harmful havens. The most recent to leave the blacklist is Antigua in the Caribbean which now joins both onshore centres such as the US and UK, as well as other offshore centres.
In order to move from the OECD blacklist to the white list, financial centres need to be signed off from twelve members in order to be assured its practices are up to the standards of the organisations. Antigua’s move will be a positive sign for neighbouring centres such as Anguilla and the Bahamas to follow suit – while fewer countries hold on to the notion that policies on tax are merely a matter of sovereign entitlement.