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August 14, 2009 7:22 pm
Clients of UK private banks face a clawback of up to £1bn of tax on offshore holdings, after HM Revenue & Customs (HMRC) was this week granted access to the details of customers of more than 300 banks.
The court order to force 308 financial institutions to reveal customers’ account details is a new measure under HMRC’s “new disclosure opportunity” (NDO), which begins on September 1 and gives people a chance to come clean about their financial affairs. It also comes in the week that the UK reached an arrangement with the Liechtenstein authorities to recoup unpaid tax from 5,000 investors with an estimated £3bn in offshore accounts.
“Never before has a tax investigation been undertaken on such a scale,” said Andrew Watt, managing director of tax disputes and investigations at tax advisers Alvarez & Marsal. “Every licensed deposit taker in London with an offshore presence has been asked to provide access to customers’ details.”
The investigation is an escalation of the campaign that began several years ago when five banks had to disclose details of more than 200,000 customers.
Under the NDO, if clients reveal themselves before HMRC obtains their details, they face a 10 per cent penalty on top of unpaid tax, but could be fined 30 per cent and prosecuted if they wait to be found out.
Tax advisers say the generous terms of the amnesty will prompt individuals to declare their assets rather than risk investigation.
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