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HMRC researches offshore market

13th Aug 2010
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The tax department raised a few professional eyebrows last week when it sent out letters to around 600 taxpayers who had taken advantage of the Offshore Disclosure Facility asking for their insights.
The HMRC letter explained, “‘To help our understanding we would like to ask you a few short questions about how you opened, operated and maintained your accounts.”

The follow up for this regulatory market research is a telephone conversation during which, HMRC promised, “Any information given to us during this call will be treated in confidence and will not be used for the purpose of reviewing your own personal affairs.”

Phil Berwick, a former inspector of taxes who now works as director of tax investigations for McGrigors, warned taxpayers to be careful about taking up HMRC invitations for friendly chats as part of their intelligence-gathering operations.

“There are dangers for taxpayers in volunteering information to HMRC,” he commented. “We know that in other instances people have rung up and have been put in a position where they’re being asked off-the-cuff questions about things they’re not really well prepared to talk about. If they want to co-operate with HMRC, fine, we would not wish to prevent them from doing that, but would suggest they do it through their accountant. If they give info which incriminates them or someone else, the Revenue won’t ignore that information.”

Berwick added that by collecting background information on how offshore accounts are operated, it may be able to widen its net to target offshore account holders who have not come forward under the Liechtenstein Disclosure Facility and similar initiatives. “I think HMRC will be looking to go after banks and advisers from the information they gather,” he said.

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