HMRC Accused Of 'Heavy Handed' Approach Over Offshore Bank Accounts

by Jason Gorringe, Tax-News.com, London

02 August 2005

Following the introduction last month of the European Union's Savings Tax Directive, HM Revenue and Customs has begun writing to offshore account holders in the UK, asking them to explain why no tax is due on the assets held in their accounts.

Speaking to the Telegraph this week with regard to the new campaign, Andrew Wyatt, a director of Chiltern tax consultants, explained that:

"HMRC is giving these people 30 days to reply with an explanation of why there is no tax liability. Our information is that these letters are being issued in cases where HMRC feels that tax fraud has taken place but there is sufficient doubt to stop just short of pursuing the taxpayer under the Hansard process, which applies to suspected serious tax fraud."

He went on to observe that:

"This is a very heavy-handed approach. Many people are unaware of whether their overseas income is taxable in the UK."

However, a spokesman for the UK tax authority countered that:

"It is ridiculous to suggest we are being heavy-handed. We have only written to about 500 people. Anyone resident in the UK should know their income is taxable in the UK."

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