TaxPersonal TaxOffshore tax probe hits the buffers

Offshore tax probe hits the buffers

HMRC crackdown on offshore accounts hits problems with information quality and inexperienced investigators

The taxman’s high-profile crackdown on offshore accounts is facing mounting
problems this week, as the timetable drags on attempts to hit tax evaders hard.

Advisers said HM Revenue & Customs was seeking a first prosecution, while
it has set up meetings with the profession, possibly as a prelude to a fresh tax
amnesty.

HMRC is due to meet the main institutes and tax experts next month as it
faces growing pressure to show a breakthrough in its investigations.

It is keen to begin high-profile criminal prosecutions of taxpayers to act as
a deterrent and show progress, but none have been forthcoming.

Stephen Camm, head of tax investigations at PricewaterhouseCoopers, said:
‘The whispers are that HMRC is desperately hunting a criminal prosecution. We
are all waiting with baited breath.

Over the weekend it emerged that HMRC’s investigation now covers up to 80,000
investors suspected of using offshore bank accounts to avoid paying UK tax.

It is understood that accounting firms extracted the information from HMRC,
which revealed the figure after a request under the Freedom of Information Act.

An HMRC spokesman said the meeting with the institutes and banks was ‘part of
ongoing discussions’ about advancing the offshore investigation.

In August Dave Hartnett, then acting chairman of HMRC, told Accountancy
Age
it hoped to begin its first offshore prosecution of an investor ‘within
months’.

‘On a score of one to ten I would probably give the investigation six to six
and a half,’ said Bob Brown, global leader for tax and investigations for Ernst
& Young.

‘The quality of information [on offshore accounts] is not as good as they
thought and they lack enough experienced investigators to run with this,’ he
said.

An HMRC spokesman said: ‘We have opened enquiries into nearly 12,000 offshore
accounts and will proceed with a further 79,000 over the next two years.’

‘We always knew the scale of the offshore disclosure project would be
significant and we are fully resourced to carry it through.’

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