UK Inland Revenue Launches Offshore Arrangements Project

by Robin Pilgrim, LawAndTax-News.com, London

14 October 2003

The UK's Inland Revenue has launched its new Offshore Arrangements Project with the announcement that 30,000 UK companies with offshore shareholders are to be investigated.

In a recent communication with tax professionals, the Revenue observed that business entities in offshore centres "control thousands of UK companies". The tax authority continued:

"The need for secrecy may be for legitimate commercial, rather than tax, reasons, but, based on cases seen by the Revenue, the high incidence of arrangements where nominees are used to hide the identity of individuals and companies represents a potential risk to the Exchequer."

Using a new software package designed to identify the offshore owners of British firms, the Inland Revenue has begun sending demands to directors of offshore companies, asking them for information such as the names of the organisation's beneficial owners, recent accounts, and details on where the company pays tax.

Speaking to the Times on Monday, KPMG tax director, Reg Day likened the initiative to "a cluster bomb", and observed that: "It's a percentage game. If you don't ask, you don't get. A number of Jersey firms have handed over information lock, stock and barrel."

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