UK Revenue to launch new crackdown on offshore accounts
UK offshore bank account holders who haven’t revealed details of undeclared money held abroad face a new probe into their tax affairs by HM Revenue & Customs, which is continuing with disclosure initiatives that raised about £400m (€503m) from unpaid taxes last year.
A spokesman from the Revenue said: “Revenue & Customs has met with industry representatives to outline its plans for obtaining details of many more offshore accounts from other financial institutions.”
The Revenue is believed to be in touch with around 25 foreign banks to reveal offshore account information.
The spokesman was not willing to reveal the names of the 25 foreign banks, but said some of them might be private banks.
Under UK law the Revenue can apply to use Section 20 of the Taxes Management Act to reveal information relevant to any tax liability. But the sanction can only be approved by a so-called special commissioner, normally a legal expert with considerable knowledge of tax affairs.
“Although the Revenue has no sanctions over foreign banks in their home jurisdictions, if information about offshore bank accounts is available to UK subsidiaries of these banks then the Revenue can apply for legal notices for them to disclose this information,” said Sue Holmes, head of national tax investigations at Smith & Williamson, a UK asset manager and tax advisory group.
Holmes said double tax treaties and cooperation among European Union members was also making it increasingly difficult for UK residents to escape paying taxes on their offshore accounts.
“The days of secret offshore bank accounts are drawing to a close,” she added.
Last year about 44,000 people revealed their offshore account details to the Revenue under the Offshore Disclosure Facility, which gave those with unpaid taxes the chance to pay the tax due, interest and a fixed 10% penalty.
The Revenue raised about £400m from the Offshore Disclosure Facility.
The move was taken after the Revenue obtained details on offshore accounts from Barclays, HSBC, HBOS, Royal Bank of Scotland and Lloyds TSB.
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