Warning HMRC's Swiss tax hit list has flaws

Swiss bank account holders who have legitimate reasons for keeping their money offshore may still be on the taxman's hit list, accountants warned.

Last week, Her Majesty's Revenue and Customs (HMRC) said it has written to 6,000 people with bank accounts with HSBC in Geneva, urging them to declare their potential tax liabilities.

Fiona Fernie, tax investigations partner at international tax consultancy BDO, urged account holders to come forward, and said many people with have legitimate reasons for not having declared their Swiss accounts anway.

"Non-domiciliary individuals would have no reason to declare an account to HMRC, but might have been contacted by the Revenue because HSBC's list of account holders would not include their domiciliary status," she said.

"Others who are UK residents may have inherited accounts from parents who lived abroad, but might be signatories on the accounts."

Dawn Register, tax investigations director at BDO, added: "The list HSBC gave HMRC is also quite old, dating from 2006, so some people might have genuinely lived abroad and moved to the UK since then."

Fernie and Register urged people who have received a letter from HMRC to seek professional advice and, if necessary, declare liabilities to HMRC as quickly as possible.

HMRC has confirmed individuals will have 30 days from receiving their letters to declare their liabilities. The Revenue has threatened to begin criminal investigations, including those surrounding possible serious fraud offences, one these grace periods have expired.

Fernie warned individuals not to confuse HMRC's demand for information now with other disclosure services such as the Lichtenstein Disclosure Facility (LDF).

The LDF, set up in 2009, gives individuals until 2015 to declare UK tax arising from offshore accounts, but people facing the current round of HMRC investigation must come forward within weeks.