Regulation  

HMRC looks to extend its reach to Cayman Islands

Sean Wakeman, tax investigations partner for tax, audit and advisory firm Crowe Clark Whitehill said the letters, which appeared to be a new resolution to crack down on any Britons with overseas bank accounts, said the letters were “encouraging” potential evaders to disclose any previously undeclared income and capital gains.

Mr Wakeman said: “This new year’s resolution by HMRC shows it is extending its reach beyond the low hanging fruit of Liechtenstein and Switzerland, and going global. This could be the start of a modern-day crusade, attacking the missing billions from the Chancellor’s coffers.”

He added: “Anyone who may have underpaid taxes should strongly consider making a tax disclosure, with professional assistance.”

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On 5 November last year, HMRC announced that the UK had signed an automatic tax information-sharing agreement with the Cayman Islands.

This meant that financial information on UK taxpayers with accounts in the Cayman Islands would be automatically provided to the taxman, to assist HMRC in its clamp down on tax evasion.

The announcement followed various similar sharing agreements signed between the UK and the Crown Dependencies of the Isle of Man, Jersey and Guernsey in October last year.

Adviser view

Duncan Glassey of Wealthflow in Edinburgh said: “HMRC is just following the US model, which it has been doing for the last decade or so, so it is no surprise that they are now extending their reach.

“It is wholly appropriate for them to pursue this, as clients and advisers should not be attempting to defraud the UK government of income.”