A matter of interest

You may have thought savings in an offshore bank account would escape the interest of the taxman. If so, think again. HM Revenue & Customs (the Revenue) recently sent out a clear message that it is taking a hard line with UK taxpayers who do not declare interest from their offshore bank accounts.

The Revenue had information that only a tiny proportion of UK resident customers with an offshore Barclays bank account had ever filed an income tax return declaring the interest from their account. It estimated the Exchequer had lost over £1.4 billion of tax from Barclays customers alone. So the Revenue applied for a ‘Section 20 Notice’, which gave it far-reaching powers to gather information from both Barclays and its customers.

Encouraged by this success, the Revenue is likely to apply for further powers to force disclosure of customers at all offshore banks with a presence in the UK.

For those customers caught, they can expect to pay back-tax, interest and penalties – with prison a possibility, if blatant and long-term fraud was involved rather than negligence.

If you are concerned that you have not declared any offshore income, or for further information on tax generally, please contact:
Sarah Albury
Tel +44 (0)20 7440 7042
sarah.albury@mishcon.com