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| HMRC extend offshore tax hunt to trust and company accounts |
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UK residents who believed they would escape the clamp down by HMRC on unpaid tax on overseas funds by holding the money in a company or trust need to think again, and think quickly, according to PKF accountants & business advisers. In April, HMRC launched a temporary "Offshore Disclosure Facility" to help taxpayers get their tax affairs up to date. Broadly, the terms of the facility are as follows:
PKF's tax investigations teams have come across a number of instances where banks have supplied HMRC with details of accounts held by offshore companies and trusts with a connection to individuals from the UK. Tax investigations partner John Cassidy believes this is no accident and points out that individuals will be liable for the same penalties if tax evasion can be proved. John said: "It has quickly become apparent that the banks' provision of information is much wider than most people expected; bank letters we have seen clearly show that they have supplied details of company bank accounts. Anyone who thinks their funds are still secret because they used an offshore company or trust might be in for a nasty surprise. "HMRC has obviously thought very clearly about catching funds held in trusts and companies or they would simply have demanded information on accounts that had opted for retention tax under the European Savings Directive (ESD) – arguably an option that is indicative of tax evasion. With company and trust affairs being generally more complex, the downside for HMRC is going to be that it is likely to end up with a substantial amount of information, much of which it will eventually prove to be worthless. However HMRC must have considered this and still believes it is worth while to go after company and trust cases. "The only sensible option for individuals who have not fully declared their income in the past is to make a full voluntary disclosure to HMRC. But anyone contemplating this approach should not rely solely on the 'amnesty' but should seek expert advice on how to do it in a way that keeps penalties and risks to a minimum while reducing exposure to further investigation and potential prosecution." Related news New arrangements for offshore disclosure agreements announced Links |
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About The Author  Sarah Laing Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences). Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession. |
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Article Added Wednesday, 16 May 2007 | 2730 Hits |
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