According to Accountancy Age John Cassidy of accountants PKF has said that:
HM Revenue & Customs 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.
He has added that:
In many cases, HMRC only knows that someone has an offshore bank account and the funds it contains at a few specific dates. 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.
I am shocked by these comments. I consider them profoundly unethical. I also think them wrong, and therefore a complete misrepresentation of the truth. People who submit a tax return sign to say:
The information I have given in this Tax Return is correct nd complete to the best of my knowledge and belief.
If having signed that (and even if despite a person not having signed that statement, since failure to submit a return when one is due amounts to de facto presentation of the above statement with regard to all income having already been taxed correctly at source) HM Revenue & Customs then find that there is evidence that a person has an offshore accounts on which interest may well have been earned (and any interest, even a pound is enough for this purpose) and on which they cannot prove declaration has been made then of course a tax inspector must have a right to make enquiry. To argue otherwise is to say that law enforcement officers may not investigate suspected crime until they have absolute evidence that it has been committed. But as we all know, law enforcement officers (and that does include tax inspectors because tax evasion is criminal behaviour as much as is any other theft) do and must have that power to investigate suspected crime and English law gives them that right, proving Cassidy wrong.
As for PKF's advice that:
taxpayers were under no legal obligation to respond to HMRC's letters
Cassidy is right, of course. But the right to silence that this represents does not mean that a person cannot be charged with an offence. So he's quite wrong to then say that a person should not in that case be sent an estimated assessment to tax. HM Revenue & Customs should have every right to do that (and I wish they'd do it more often - estimated assessments in pre-self assessment days were a fantastic weapon for getting information out of people) so long as they have sufficient grounds for suspicion, which is equivalent to having sufficient grounds for charging a person with an offence. It seems highly likely that they have that in these cases.
The person subject to that enquiry still then has the right not to cooperate - that is their choice. But if by choosing not to defend themselves against the evidence that is presented at stages up to and including a hearing they are then found found guilty of a crime, so be it. The legal system has found they are guilty in that case. That's the way English criminal law works, in case PKF have not noticed. And I would remind him, tax evasion is a crime. So what Cassidy has said is wrong, as a matter of fact.
But what worries me is why he said something so completely wrong. Is it that he thinks those criminals guilty of tax evasion should be subject to different legal processes from all other criminals? If that's the case PKF (who are, I should add, a major tax haven operator) treading on very dangerous ethical ground indeed.
I'd be curious to know the answer.