In brief...: Warning for rich over tax loopholes

Apr 25 2008

Wealthy Scots are being warned to be wary of trying to avoid paying UK tax by holding their money offshore.

Hmrc has recently issued thousands of letters to people who may have undeclared offshore bank accounts.

It comes after the body obtained details of 400,000 accounts in the Channel Islands, Isle of Man, Republic of Ireland, Gibraltar and Cyprus from five high street banks.

About 25 per cent of those accounts are thought to have unpaid tax outstanding with 62,000 people coming forward in return for a reduced fixed penalty.

Accountants KPMG found 45 per cent of customers who came forward to make a declaration were not customers of the banks which provided HMRC with information.

Now they estimate there could be 65,000 people who have still to declare their offshore accounts.

Russell Hills, head of tax for KPMG in Scotland, said: "The Revenue has reserved the right to pursue a criminal investigation with a view to prosecution where they consider it necessary and appropriate, however those who come forward could find favour with the authorities.

"It is therefore essential that everyone with an offshore account urgently reviews their tax affairs and takes professional advice."