On Tuesday 22 November HMRC announced the launch of its Offshore Coordination Unit (OCU), which is tasked with investigating UK residents with undisclosed overseas assets.
One of the OCU’s first tasks was to co-ordinate the letters to UK residents in connection with the Swiss HSBC account data. The letters warn that the individual is under investigation and there are three routes they can take:
- Confirm there was no disclosure to make;
- Confirm a disclosure is to be made via the Liechtenstein Disclosure Facility (LDF); or
- Confirm a disclosure is to be made via another route.
The details of the people affected by these letters were obtained from the French tax authorities and 500 individuals have already been investigated under Code of Practice 9 – cases of suspected serious tax fraud. In certain cases, there is still a risk that HMRC will pursue this course of action.
We recommend that any clients affected by these letters take steps now to ensure the correct course of action is determined within the prescribed timeframe.
If there is a disclosure to make, the LDF route should seriously be considered. This has the following benefits:
- HMRC only seeks to recover taxes for years commencing on or after 6 April 1999;
- The penalty is limited to 10% of the tax unpaid;
- HMRC guarantees immunity from prosecution for the offences covered by the facility; and
- There is no need to meet with HMRC.
A historical connection with Liechtenstein is not necessary as we are able to assist in the creation of the necessary link with a financial intermediary.