HSBC scrutinises Jersey account holders - 2012-11-15
HMRC has received a full list of HSBC's UK clients with Jersey bank accounts – according to the Daily Telegraph - from one of the bank's employees. In the current climate this is something that is not altogether surprising, and we are told that HMRC is now working its way through that list to see if it matches with reported income on the tax returns of the account holders.
The emphasis by the press is very much on the use of accounts for evasion but, in reality, the vast majority of the accounts are likely to be held by individuals who have either reported income on their UK tax returns, or are not obliged to do so because they are not UK domiciled. For that majority, it is very unlikely that they will hear anything from HMRC. However it is possible that in some cases HMRC will use it as an opportunity to look into an individual's domicile status. There will also be some who've never held an account at HSBC but receive a letter because of mistaken identity or mis-matching of records by HMRC.
Those few individuals who have used the accounts for evasion should take advice on making a full disclosure to HMRC now, rather than waiting for the Tax Man to come to them as, in many cases, that will allow them to settle more favourably than if they wait.
If you do receive a letter, then it should be discussed with your professional adviser straight away.
This latest incident is yet another indication of HMRC's increasing scrutiny of accounts in low or no tax jurisdictions. In this case it has arisen through “unofficial action” by a whistleblower but we are also seeing countries putting official pressure on tax havens to disclose information. It emphasises the need to make sure that all tax affairs are fully up to date and if someone is relying on their non-UK domicile status to not disclose non- UK income and gains, it is important to have a robust defence in place if HMRC challenges that status.
We can help either with advice on disclosures to HMRC, or with ensuring that you have a robust non UK domicile defence in the event of a challenge.
For advice, speak to your usual Littlejohn tax advisor or contact Ross Welland on +44 (0)20 7516 2212 or email firstname.lastname@example.org