Tax Data Gathering Powers Lead to Investigations

According to the Chartered Institute of Taxation, HM Revenue and Customs (HMRC) are using data collection powers to uncover the ultimate beneficial ownership of offshore companies and trusts. The information is being obtained from UK-based providers of trustee services and their overseas subsidiaries.

The move is part of an attempt to tackle tax evasion and the concealment of the ownership of assets using often complex offshore vehicles, and is part of the 'No Safe Haven' strategy being employed by HMRC.

The 'target' firms are mainly accountants, law firms and company formation agents, and the information gleaned has already led to the commencement of a number of tax investigations.

HMRC are increasingly using 'data led' techniques to instigate investigations and, where suspected tax evasion of significance is suspected, to bring criminal charges.

For the taxpayer, an investigation can be a very stressful experience and the threat (realised or not) of criminal charges even more so.