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‘Offshore crackdown breaches English law’

HM Revenue & Customs is turning the English legal system on its head by demanding information from thousands of offshore bank accountholders, claims tax accountant PKF.

HMRC is in the process of sending letters to 5,000 inv- estors who have not already disclosed information as part of its crackdown on offshore account holders.

PKF tax investigations partner John Cassidy says HMRC is demanding explanations of why investors who failed to respond last year think tax is not due.

However, Cassidy says demanding proof of innocence contradicts English legal principles.


He says that accountholders are under no obligation to respond to the letters but are likely to face further investigation.

Cassidy says: “Legally, in order to issue an assessment for unpaid tax, HMRC must have made a discovery or, in other words, have actual knowledge that further tax is due, not just that it might be due.

“Yet the threat is that such assessments will definitely be issued unless informal, voluntary answers are given to the questions raised.

“The fact is that taxpayers are under no legal obligation to respond to these letters but the reality is that anyone who ignores one will ultimately face an assessment seeking to collect the tax assumed to be due, perhaps after a detailed investigation into their tax affairs.”

A HMRC spokeswoman says: “From March 17, HMRC began issuing letters, forms and helpsheets to around 5,000 people who we have information from indicating they currently have or have previously held an offshore bank account or accounts but who did not disclose under the offshore disclo- sure facility.

“Everyone should have contact from us by April 4. This approach is designed to encourage those with unpaid tax and duties to pay what they owe.”

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