HM Revenue and Customs (HMRC) is set to contact around 5,000 offshore account holders to request a formal declaration of their account details.
HMRC has sent a letter and a form to those offshore account holders that did not disclose their financial affairs during its offshore disclosure facility between 22 June and 26 November last year.
Gary Ashford, tax investigations director at Grant Thornton, says people receiving letter from HMRC are being contacted because one or more banks have records suggesting they hold, or have held, an offshore bank account.
"The letter in itself is no cause for alarm,” says Ashford, “as many offshore account holders will not have used the offshore disclosure initiative because they had good reasons for holding an offshore account which they didn't feel required further explanation to the taxman.”
Ashford says these savers should reply to the letter with an explanation of why they did not disclose details of their accounts.
However, he warns that those who knowingly avoided disclosure when they knew they should have informed HMRC of their accounts could face penalties of up to 100% of the tax due.
Ashford says those who have avoided disclosure should own up, as HMRC is taking cooperation into account when setting fines. However, he says tax penalties will be no less than 30% of the balance owed.
HMRC has recently received increased powers through the last Budget and he says companies and self-employed people should be prepared to receive spot-check visits from HMRC officials in the coming months.
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