From the Telegraph this morning:
Banks could find their role in helping wealthy customers move money offshore come under increasing scrutiny, with HMRC looking to build up a detailed picture of how some of the UK's largest financial institutions have made hundreds of millions of pounds advising on tax avoidance schemes.
In a copy of the letter seen by The Daily Telegraph, recipients are asked to answer "a few short questions about how you opened, operated and maintained your accounts".
The information provided is likely to form part of a wider investigation by HMRC, which is keen to crackdown on tax avoidance structures that allow wealthy Britons to keep large parts of their wealth in offshore, low-tax jurisdictions, such as Liechtenstein and Jersey.
The 600 recipients of the letter are understood to have been picked at random by HMRC.
This is very encouraging. It suggests that HM Revenue & Customs is at last beginning to see this as a systemic problem.
It seems some might realise this. As the Telegraph notes:
Lawyers have warned those receiving the letter to be wary about what sort of information they disclose to HMRC.
Phil Berwick, director of tax investigations at law firm McGrigors, said recipients should not be "na?Øve" in their dealings with the authorities, adding that HMRC would not "just brush that information under the carpet".
"It will be easy for taxpayers to slip up and incriminate themselves, or give off-the-cuff responses to HMRC in a phone call," he said.
"The concern is that these phone calls will just turn into fishing trips to quiz high net worth taxpayers about their financial affairs," he added.
If you can incriminate yourself by answering such questions then you’ve definitely got something to hide. And, as I’ve always argued, that means someone helped you do it. The offshore service providers should be worried.
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“If you can incriminate yourself by answering such questions then you’ve definitely got something to hide”
The cost of an HMRC investigation is huge, even when they discover nothing is wrong (there is no compensation for a false accusation). Thus it is very important to save expense and time by answering questions accurately. That usually requires expert help.
I myself once used the vernacular “partner” to answer a question from the Revenue, which lead to all kinds of horrible complexity because they interpreted “partner” in the tax sense, and I used it in the co-founder of enterprise sense. Did I have anything to hide? No. Did it cost me for not having professional advice? Yes.
It would be mad to answer such questions without legal advice – especially if one had done nothing wrong.
@ukliberty
Why?
[…] welcomed a new line of enquiry by HM Revenue & Customs on offshore accounts, reported this morning. In saying so I did, however, imply that I thought HMRC was not asking, systematically, the right […]
Robert Webb provided a good example.
Assume the interviewer and interviewee are honest. Is the interviewee competent, is he fully cognisant of the pertinent legislation and regulation? Does he get his words mixed up? Will the interviewer and the interviewee think they are talking about the same thing but actually talking about different things? Is the interviewer competent? Does he ever make mistakes? Will his recollection fail at vital moment, will he recall something different to what was said (an honest mistake)? And so on.
It would be wrong to read any dishonesty into an interviewee seeking advice for the simple reason that the interviewee is not a professional and any mistakes he makes could prove costly and time-consuming (if not worse).
@ukliberty
In fairness, I tend to agree with you
But in fairness, I also think it is time HMRC tried to focus on the systemic issues and not minor slip ups which reality yield much in the way of anything but hassle
Hence these blogs
[…] welcomed a new line of enquiry by HM Revenue & Customs on offshore accounts, reported this morning. In saying so I did, however, imply that I thought HMRC was not asking, systematically, the right […]