HMRC are continuing their campaign to track funds held offshore in a bid to reclaim any unpaid taxes. This month alone, HMRC have issued letters to 600 taxpayers who have taken up the Offshore Disclosure Facility in a bid to understand how the accounts operate. They have asked the taxpayers to provide them with information regarding how the accounts were set up and how they operate.

HMRC are also planning to follow these initial investigative letters up by telephoning the individuals. They have stated, however, that the information gleamed from these conversations will not be used when assessing an individual’s tax liability but will be treated in the strictest confidence.

However, despite the promises, former tax inspector Phil Berwick has issued a stark warning to taxpayers about such informal chats with HMRC. He points out the risks of volunteering to provide the taxman with information which could be used against them in the future if the answers they provide are in any way incriminating. Mr Berwick advised that questions should really be answered via an accountant.

The aim of its current programme of investigations is to obtain information regarding particular banks and advisers who are operating schemes that are unofficial. However, there are many legitimate schemes, such as the Liechtenstein Disclosure Facilities that has seen 700 contractors and independent taxpayers declare their offshore savings with more and more people disclosing every month. With further Liechtenstein legislation expected in September, the number of disclosures are expected to rise even further since this legislation will place a responsibility on all Liechtenstein banks to make contact with any clients suspected of holding undeclared sums of money offshore.

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