10 Feb 2014

HMRC attack “hidden wealth” in London

BKL Briefing, Insights, Publications

HMRC have recently announced that they are to launch a taskforce specifically to target individuals and businesses in London and East Anglia whom they suspect of hiding their income from them. The taskforce will focus both on individuals who have offshore bank accounts who have not as yet come forward as part of any of HMRC’s offshore disclosure facilities and on those whom HMRC suspect of living lifestyles which are inconsistent with their apparent resources.

In this latter regard, HMRC have developed a sophisticated risk profiling tool, called “Connect” which enables them to collate substantial amounts of information about a person or business, before they even visit an individual. This information may include details of overseas bank accounts, acquisitions of property, car purchases, purchase of privileged number plates, planning applications for land / property extensions, private schooling for children etc. If information is out there you can now assume that HMRC can not only access it but also make use of it.

Obviously, there may be a number of perfectly innocent explanations as to how an individual can afford a lifestyle which may not match their apparent taxable income. Examples might include substantial inheritance or lottery wins to name but two. In such cases, there is nothing to fear from a visit by HMRC. However, if the source of wealth has come from untaxed business income or unreported income from an overseas bank account, then it may be appropriate to consider HMRC’s Liechtenstein Disclosure Facility and make a voluntary disclosure to HMRC before they catch up with you.

If you have “something to declare” there are significant financial advantages (as well as peace of mind) in taking the initiative and approaching HMRC rather than waiting for the knock on the door. For a confidential discussion on your options on bringing tax affairs up to date, please contact us.