The Spy in your PC - new HMRC Tax Investigation gets ugly?

Posted by William on November 6th, 2009 in Tax Advice

Hi everyone,

this is an important update for some of you.

The Taxman continues to turn up the heat on people with offshore accounts.

In his latest initiative Dave Harnett, permanent secretary for tax at HMRC, has turned to social networking sites such as You Tube and Facebook to try and encourage people to declare their offshore investments.

In a video posted on You Tube Mr Harnett states…

“For some people, offshore bank accounts and tax havens typically conjure up images of exotic and far away places, well out of reach of the taxman at home. Well life’s not like that anymore. The taxman now has more powers and more information”.

As I’ve highlighted on this site before in other tax avoidance articles, the focus on offshore investments began in 2007 and Mr Harnett has stated in several interviews that he sees the exchange of tax information on request as the first step only. His vision is that the automatic exchange of information is what the HMRC ultimately will push for as the international benchmark. The Isle Of Man has already complied and he hopes that other jurisdictions will follow this “mature approach”.

The holding of these accounts of course is in no way illegal but if you receive income and do not declare it in your tax return then the Tax Man wants to hear from you with your intention to disclose before the 30th November 2009.

Disclosures in writing can be made to HMRC up until 31st January 2010, and electronically up to 12th March, 2010. If you do not comply and are found to have undeclared tax liabilities then the fine will be at least 30% of unpaid tax with the potential to go up to 100%. They are also more likely to find themselves up in court. For those who tow the line and declare by the deadline their penalty will be capped at 10%. As you will have noted in the video, there’s even talk of jail.

Whether or not you agree with these measures is irrelevant, because it is clear that the HMRC mean business on this matter. The world is a vastly changing place and the internet has made it much smaller with information on anyone readily available at the click of a mouse.

Therefore it’s time to be aware folks, Big Brother’s, Wee Brother is now watching you as well, and remember everywhere you go and every site you visit online is auto-recorded electronically - even more so now with sites such as Facebook. Linked In and Twitter playing such a big part in people’s lives.

Until next time!