Last week HMRC sent out letters to some of the taxpayers who had taken up the Offshore Disclosure Facility to ask them for their insights.
Around 600 people received the letters which asked them to answer some short questions about their accounts. The Revenue said this was to help them understand how the accounts were opened, operated and maintained.
These letters will be followed up by a phone call but HMRC has promised that any information that is divulged will be treated in confidence and not used when reviewing an individual’s personal tax affairs.
Phil Berwick, who used to be an inspector of taxes and now works for McGrigors, has warned people to be careful about these invitations from the taxman to have a friendly chat. He says there are obvious dangers in volunteering to give information to HMRC. There have been instances when people have been asked questions that they’re not prepared for and they’ve given the Revenue incriminating information which could harm them in the future. It’s fine to co-operate with the taxman if you so desire, but it’s probably better to do so via your accountant, he advised.
It’s probable that the Revenue is looking to widen its net so it can target people who have not taken advantage of schemes such as the Liechtenstein Disclosure Facility. By questioning taxpayers, HMRC will be gathering more information so it can go after additional banks and advisers, he added.
So far about 700 taxpayers and limited company contractors have declared their offshore accounts under the LDF. In March, the figure stood at 419 and the Revenue says the increase shows that the amnesty is working.
Tax advisors are expecting the figure will rise once new legislation in Liechtenstein comes into force in September. From next month, banks in the principality will have to contact any of their clients who they believe have undeclared UK tax liabilities.
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