I have been chased by journalists (all from outside the UK) today asking what the UK decision to force offshore banks to disclose details of account holders to HM Revenue & Customs might mean. The Swiss are particularly keen.
The honest answer is, of course, that we do not yet know.
The most likely answer is that it depends on two things — first whether the banks appeal and succeed in doing so and second how far the UK is willing to go to enforce this.
I doubt there will be a successful appeal. I can’t see why there should be. I could argue the point for hours: I’ll leave it at that.
And I’m not sure how far the UK could go, but the obvious answer is they could close down a bank’s operation in the UK if it refused to cooperate.
Will they? I don’t know. I hope they threaten it. I hope the Swiss are very worried. And as I told their radio: they should be. they can do what they like domestically on bank secrecy but they have no right to impose their law on us. If they want to be in the UK (and every bank does) then they have to play by our law or go.
It’s a blunt message. I hope it is delivered.
Then we’ll see radical action following on from this decision. Which is good news for the UK, and very bad news for cheats.
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I know of many people who predicted that HMRC would need to seek individual authorities relevant to each and every bank. And that the banks would appeal to defer the prospect of having to comply. In effect the predictions were very wrong.
I’m as pleased as you that HMRC has secured this outcome Richard.
I must be missing something as it seems to me that there is a simple answer to the question which you have not addressed above. Doesn’t the UK decision on offshore banks simply mean that the banks will have to comply and provide the required disclosures to HMRC?
Mark
Well, yes you’d have thought so, but it seems the briefings they’re giving out in some other places (like Switzerland) is that they can’t comply because that will breach their domestic law
And the Revenue can only enforce of course if there is a UK presence
So I think a) there will be a challenge, UBS style and b) some will quit.
As I said, those who quit will effectively be putting up a sign saying ‘tax evaders welcome here’
Heaven knows if that will survive the edit in Geneva!
Richard
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