HMRC accused of disregard for legal system

John Cassidy,
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

Banks set for offshore account showdown with HMRC

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