HMRC scrutinising 3 million offshore accounts held by UK taxpayers

Pedro Gonçalves
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HMRC scrutinising 3 million offshore accounts held by UK taxpayers

Overseas authorities have shared with HMRC the tax secrets of over 3 million UK taxpayers holding offshore accounts across 100 countries.

The information was delivered in the past two years and is undergoing analysis by HMRC staff. HM Revenue and Customs is currently comparing the figures with those reported on tax return filings to detect possible tax avoidance cases.

The information as been delivered to HMRC under an international data swapping agreement called the Common Reporting Standard. CRS is a network of global tax authorities in more than 100 countries working together to tackle tax avoidance.

It is important to remember that 1 in 10 having an offshore financial interest does not mean that 1 in 10 have underpaid UK tax as a result of an offshore financial interest"

Under CRS, network members send the details of any accounts held by non-residents to the tax authority in the country where they live.

HMRC said that the global implementation of CRS is "shedding unprecedented light" on the overseas arrangements of UK residents. It said that early analysis of the information HMRC received last year suggests around one in 10 UK taxpayers have an offshore financial interest.

"It is important to remember that 1 in 10 having an offshore financial interest does not mean that 1 in 10 have underpaid UK tax as a result of an offshore financial interest," said Josie Hills, a tax investigations expert at Pinsent Masons, specialised news outlet out-law reports.

The HMRC paper also reveals civil and criminal investigations resulting from the Panama Papers document disclosure will yield over £190 million in unpaid tax and penalties. The papers are millions of financial documents were exposed in a leak at a legal firm in Panama representing wealthy individuals around the world.