Revenue & Customs expects to receive back hundreds of millions of pounds from Britain’s wealthy, after banks handed over personal details of 400,000 customers with offshore accounts. By the information received by Revenue & Customs, there are uncovered City bonuses, inheritance windfalls and foreign holiday homes hidden in offshore tax havens such as Jersey, the Isle of Man and the British Virgin Islands. The Revenue’s director-general Dave Hartnett expressed his concern about the way in which offshore schemes in these jurisdictions had been sold by high street banks.
In an interview he gave to the British newspaper The Sunday Times Dave Hartnett said that in most cases the offshore schemes may have been used illegally to avoid tax. In some cases tax evasion continued for many years, and the result was hundreds of millions of unpaid tax. It should be said that the level of offshore tax avoidance among British citizens has never been estimated before, and the number of offshore accounts discovered has surprised even tax professionals.
In April 2007 the Revenue & Customs announced a two-month “amnesty†for people to declare money placed in offshore jurisdictions including British Virgin Islands. The deadline to make a declaration is June 22. By words of Harntett, the Revenue had so far been approached by 34,000 people, and 4,000 have confirmed they would be disclosing hidden assets and paying all the taxes.
In the last few months, the high street banks have been forced to hand the Revenue details of their customers’ accounts in offshore jurisdictions. The investigation may also spark a Financial Services Authority (FSA) probe into the high street banks’ activities. Mike Warburton, a senior tax partner at Grant Thornton, has said that some people applied to him who had been sold offshore tax schemes by banks but claimed to be unaware of the tax situation. Most of the high street banks have set up separate offshore operations with branches in tax havens around the world.