HSBC Jersey clients quizzed by HMRC
Jersey bank account holders have been invited by the UK tax authority to declare any undisclosed tax liabilities by the new year, or risk being investigated under suspicion of tax evasion, reports the Financial Times.
Customers of HSBC Jersey received a letter from HM Revenue & Customs this week asking them to sign a certificate declaring that they owe no UK tax on their offshore assets, including “the source of the funds in [their] Jersey bank account”.
Recipients have until December 31 to submit their declaration. HMRC wrote that it “may start a detailed investigation into [their] tax affairs” if they do not reply.
“This is very clever from the Revenue,” said Tessa Lorimer, special counsel at law firm Withers. “In effect, they are getting a disclosure that could be used to prosecute anyone who makes a false statement.”
Mark Davies, a tax consultant whose clients have received the letter, described it as a “catch 22”. While those who ignore it risk greater scrutiny from HMRC, signed statements could be used as evidence against taxpayers in the future, he said.
“You’re being asked to make a disclosure that you wouldn’t normally make . . . It’s not asking you to confirm the statements are correct ‘to the best of your knowledge’, it’s absolute.”
Mr Davies said the tight deadline seems intended to “press taxpayers” into signing up and volunteering information. “The big stick here is that [recipients] appear to be at the top of the queue to be investigated.”
Given that HMRC cannot yet access details of offshore bank accounts, Derek Scott, head of private client tax investigations at KPMG, said it is most likely this group of Jersey account holders were targeted simply because the authority has their information on file.
Details of roughly 8,500 of HSBC’s Jersey account holders, more than half of whom were Britons, were publicly — and controversially — leaked three years ago.
“The Revenue is now effectively saying, ‘we know you’ve got an account in Jersey, so declare anything you need to by the end of the year’,” said Mr Scott.
HMRC said its letter to Jersey bank account holders was “one of a number [it] routinely sends” to taxpayers to improve compliance, rather than part of a targeted effort against HSBC customers.
“We are not saying that these taxpayers have done anything wrong,” HMRC said. “If they are confident that their tax affairs are above board, we ask them to fill in a certificate telling us so.
“There will be serious consequences for those with undeclared offshore income and gains who do not come forward voluntarily.”
HSBC declined to comment.
Ms Lorimer said HMRC would be likely to follow up on this letter in the new year by interrogating the affairs of those who fail to respond and those who declare that they will make a last minute disclosure on favourable terms through the Liechtenstein facility, which closes on December 31.
