HMRC has been receiving details on overseas bank accounts held by UK taxpayers since January 2016, as part of a global clampdown on the suspected underpayment of taxes.
The Common Reporting Standard (CPR) will increase the exchange of information between governments on the savings and investments of individuals. This will allow HMRC access to an unprecedented level of detail on financial accounts held abroad.
More than 50 countries have signed up to the information-sharing agreement, including Switzerland, Jersey and the Cayman Islands.
HMRC will be able to compare the data it receives from abroad with its own records to identify discrepancies and potentially suspicious activities.
Many UK taxpayers will hold international accounts for perfectly legitimate reasons, especially those who have lived or worked overseas. The increased level of scrutiny, however, means that many who have done nothing wrong could still find themselves subject to a lengthy and disruptive tax investigation.
If potential grounds for a full criminal tax investigation are identified, overseas assets could be frozen, which could create real financial difficulty for the owners.
The increased access to information on international accounts reflects the growing pressure to crack down on all perceived underpayment of taxes.
Any taxpayer with an overseas bank account now faces an increased threat of investigation by HMRC.
However, the changes represent just one step in the broadening reach of HMRC investigations. HMRC is now clamping down on taxpayers from all walks of life, and is leaving no stone unturned as it strives to increase revenue, gathering data from a multitude of sources.
The heightened risk of investigation means that many taxpayers are opting to protect themselves against the costs that can be incurred in a tax investigation.
We offer a comprehensive insurance scheme that will cover the costs of any work we undertake on your behalf in any HMRC tax investigation.
Please contact us to find out more.