John Cassidy, PKF Accountants tax investigations partner, has claimed HM Revenue & Customs is has scant regard for the central tenets of the English legal system by presuming taxpayers are guilty when it sent letters to 5,000 offshore account holders.
‘In many cases, HMRC only knows that someone has an offshore bank account and the funds it contains at a few specific dates,’ he said. ‘It has little idea how much interest was earned on the deposits, where the money came from or the key question of whether there is an undeclared UK tax liability at all.
‘Legally, to issue an assessment for unpaid tax, HMRC must have made a discovery or, in other words, have actual knowledge that further tax is due, not just that it might be due. Yet the threat is that such assessments will definitely be issued unless informal, voluntary answers are given to the questions raised.'
Cassidy said taxpayers were under no legal obligation to respond to HMRC’s letters, but the reality was taxpayers ignored the letter at their peril and would ultimately face an assessment of the tax assumed to be owing, ‘perhaps after a detailed investigation into their tax affairs’.
Further reading:
Taxman demands answers on 5,000 offshore bank accounts
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