Taxman demands answers on 5,000 offshore bank accounts

The taxman has sent letters to 5,000 people who did not respond to the
off-shore disclosure facility asking them if they owe any tax.

HM Revenue & Customs obtained the details of 400,000 offshore bank
accounts from High Street banks and then offered an offshore disclosure facility
to any taxpayers who had not disclosed earnings in offshore bank accounts
earlier.

HMRC is now using the letters to follow up on those who did not come forward
during the offshore ‘amnesty’ period.

The letters that will be sent out say: ‘Your bank(s) has provided us with
details about your account(s). For a limited period HMRC offered a facility to
help offshore account holders to get their tax affairs up to date – the offshore
disclosure facility.

‘Now we are contacting people where we have information but we cannot tell
from our records if they have told us about their offshore accounts, and they
have not sent us a notification under the terms of the offshore disclosure
facility.’

The letter calls for taxpayers to respond in 30 days.

The letter warns that if recipients choose not to respond they ‘risk being
the subject of a formal tax enquiry’ and that the ‘penalty could be up to 100%
of the tax and duties due’.

‘This is a complicated compliance check by the taxman. They are depending
very largely on the willingness of offshore account holders to inform the taxman
of their financial details,’ said Chas Roy-Chowdhury, head of taxation at ACCA.

He added: ‘If this is not done proactively, the taxman will find other ways
and means, such as targeting banks and finance providers. They are intent on
getting the information they want.’

Further reading:

Visit the HMRC
offshore bank accounts page

Banks set for offshore account showdown with
HMRC