UK steps up hunt for offshore tax evaders

| 07/06/2011

(Daily Telegraph): Around 5,000 offshore account holders who failed to let HM Revenue & Customs (HMRC) know about their overseas savings are being written to in the latest stage of the crackdown by the UK Government on tax evasion. HMRC has sent letters to those who hold offshore accounts but did not reveal details of them during the amnesty between June 22 and November 26 last year.  Since the Revenue has obtained information on account holders through a number of banks, savings institutions and as a result of the European Savings Directive, tax evaders are running out of places to hide.

Expats may have legitimate reasons for having an offshore account, perhaps to build up savings for a rainy day, or retirement, and others may be using them as an easy means of accessing their retirement income. For example, anyone being paid a UK pension would need to have that money remitted somewhere, and it could be that these pensioners are unwittingly falling foul of the disclosure rules.

Gary Ashford, a tax investigations director at accountants Grant Thornton, said those who receive a form must send it back to HM Revenue, "which will use this information to verify an individual's reply and either let the individual off or apply penalty tax accordingly".

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  1. Financial Bobo says:

    Not sure this article makes sense. The UK HMRC is only bothered about people resident in the UK who have offshore accounts.

     

    So whilst (former) expats may have good reason to maintain offshore accounts, there seems little likelihood and little sense in a UK resident having a UK pension paid to an offshore account (your example above).

     

    Either way, if you're tax resident in the UK, you have to disclose your income and are taxed accordingly. Quite right too.

     

    BTW don't be too ready to take up an HMRC amnesty offer. They're usually followed up with an audit of everything else!