Swiss account holders stalked by a fallible taxman

The taxman is writing directly to UK individuals, trusts or companies whom they believe to hold, or have held, accounts in Switzerland with HSBC. Some 6,000 customers of HSBC are being targeted, writes Paul Spindler, partner in the technology group at Kingston Smith, the chartered accountancy firm.

These letters will apparently refer to specific account names and numbers and responses will be expected within a short period of time, either to confirm that returns have been properly and fully completed or to commit to making a full disclosure.

Where a response is not received, HM Revenue & Customs will be using its full range of statutory powers and may consider cases for criminal prosecution. Where penalties become an issue, these may be up to 200% of any tax involved.

Clearly where the relevant accounts have been properly disclosed (or perhaps not required to be disclosed), this will have to be explained to HMRC.

Where there may be possible failures to disclose then very careful consideration will be needed to decide upon the most appropriate steps and the best way to make any disclosure to HMRC. This could be under the Swiss Agreement, the Liechtenstein Disclosure Facility or by other routes.

Either way some prompt action will be needed from taxpayers to establish the true position and to manage the situation with HMRC.

And in general for UK individuals, with an ever increasing attention to enquiry and investigation work by HMRC, across all taxes, along with a more stringent penalty regime, it is becoming even more important to ensure that any returns are completed with reasonable care as to their accuracy and completeness, and are submitted within the relevant time limits.

While HMRC do have access to a great deal of information from other sources and a much greater ability to cross check to taxpayers’ records than in the past, in our experience they are
by no means always right. For example, a significant proportion of the enquiries we have concluded relating to queries about bank interest possibly not declared have resulted in no adjustment being due. In a number of other instances it has been possible to negotiate lower penalties than those originally suggested by HMRC and in some cases no penalty at all.