HMRC begins to ask the right questions

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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.