UK Inland Revenue Concerned Over Offshore Accounts

by Philip Morton, Investors Offshore.com

16 January 2003

The UK's Inland Revenue announced this week that it plans to crack down on the thousands of British investors and savers who open accounts overseas in order to avoid paying UK tax on their income.

Speaking to the Times newspaper, unnamed 'sources close to the Revenue' suggested that there is a 'major fiddle going on', with up to £7 billion thought to disappear from the UK to accounts in countries such as the Republic of Ireland, Switzerland, and France each year.

'The Revenue is going to investigate people who are advised by financial institutions to make arrangements to place money overseas. The Revenue will look at people who are using this sort of account as a vehicle to avoid paying tax,' an insider told the Times on Wednesday.

This announcement follows hot on the heels of IR Chairman, Sir Nick Montagu's warning to corporate and individual taxpayers in the United Kingdom. Speaking earlier this month, Sir Nick observed that:

'The link between taxes and the social goods that would be impossible without them is the very foundation of tax morality and cannot be stated too often. The public at large resents large-scale avoidance as dodging the contribution to the UK's needs.'

However, Sir Nick's new 'moral' campaign has been seen as somewhat ironic by observers in light of the recent controversy over the tax authority's dealings with Bermuda-based Mapely Steps, regarding the sale of the Inland Revenue's property portfolio.

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