Employment Tax Expert

It has been strongly rumoured that whistle-blowing website WikiLeaks will expose thousands of wealthy bank clients who have used offshore accounts to avoid tax.

Former Julius Baer Bank employee Rudolf Elmer has handed over two CDs containing the potentially dangerous information to WikiLeaks founder Julian Assange. Elmer who is to stand trial accused of coercion and violating banking secrecy laws – has said he wants to expose mass potential tax evasion.

It remains unclear exactly when and how much information will be released, although it’s been suggested that Assange will start publishing the leaked details in two weeks time after verification.

So If you’re someone that has an offshore bank account that is undeclared you need to come forward and declare it asap because there is no telling which tax authorities Elmer may have passed the details on to as well as WikiLeaks and there is every chance that HMRC will launch a tax investigation into reported cases

The Elmer list is not thought to be the one HMRC had previously bought, although WikiLeaks could hand over some of the information to the Serious Fraud Office.

The CDs are understood to include the details of 2,000 wealthy individuals and corporations from the UK, US, Germany, Austria, Asia and elsewhere.

Tax investigations are taking a new, slightly sinister twist – HMRC are allegedly demanding personal financial records from business people, without proper grounds for suspicion.

This comes about at a time when Section CH223430 of HMRC’s Tax Investigation handbook appears to have “disappeared. Now I know you’ll be asking what the hell is this reference all about, well it tells inspectors that they need to find something significantly wrong, questionable or suspicious in a business’s record (ie they need to ‘break’ the record) before they can demand personal financial details from an owner or director of that business.

A number of people have noticed that this has become worryingly commonplace, Anne Eager, enquiries manager at RJP, stated:

“I have had requests for private bank records from my clients in opening letters. When I challenged the request, the inspector said that it was to save time, as he felt it was very likely there would be issues with the records.

He added it was a ‘standard approach’ under the new regime.”

In other words HMRC are indulging themselves in fishing trips into people’s private bank records. Once HMRC have access to those records every payment into the account would be under suspicion, and it would be for the taxpayer to prove that the payments in do not constitute taxable income. Innocent until proven guilty – not in the tax world!

and what you may ask has happened to Section CH223430 will return , HMRC claim it will return but why was it removed/dropped in the first place?