Banks Alarmed by Assault on Offshore Accounts 

HM Revenue & Customs  is attempting to compel banks to release the names of thousands of customers with offshore accounts as part of its fight against tax evasion — despite fears that it may be overstepping its legal authority.

“HMRC is expected to meet representatives from the banking industry on Monday to discuss their concerns over plans to seek a legal order forcing about 170 banks to hand over the records of customers with a UK address who also hold an offshore account, regardless of whether they are even liable to pay tax.”

“Last year HMRC succeeded in retrieving the names of more than 400,000 customers from several high street banks but a two-month amnesty recovered only £400million. The taxman believes that billions of pounds of unpaid tax remain hidden offshore.”

“A letter to industry groups this month reiterated HMRC’s intention, announced in September, to step up the investigation to include customers at a much larger group of banks.”

Lawyers say the banks had a strong case to resist the demands of HMRC but the banks are reluctant to pursue it.

“Heather Gething, head of tax planning and tax disputes at the law firm Herbert Smith, said: ‘The banks are obviously concerned they will be seen to be supporting tax dodgers if they don’t co-operate.”

“Any taxpayer who stands up for their rights is in danger of being considered by the Revenue as uncooperative and portrayed as the bad guy.’”

“Banks are bound to protect confidential customer information unless ordered by a court or special commissioner to release it.”

“However, they indicated that they would co-operate with the Revenue.”

In a response, the acting chairman of HMRC, acknowledged the banks’ fears but said that the Government was determined to crack down on tax dodgers.