Brits with Swiss accounts get threatening letters from HMRC

Thousands of UK resident holders of Swiss bank accounts will receive letters from HM Revenue & Customs (HMRC) this week threatening a thorough investigation into their tax affairs.

Accountants UHY Hacker Young said many of the recipients of the letters are completely innocent of any wrongdoing, but may suffer unnecessary worry and expense as a result.

Taxpayers receiving letters will have 30 days from receiving the letter to make a full disclosure of any tax irregularities.

The letters suggest failure to do so could result in a full investigation supported by HMRC's statutory powers.

However UHY Hacker Young said the letters also imply taxpayers are already under investigation.

According to the firm the letters states: 'We have started an investigation under the terms of a new agreement between the UK and the Swiss Confederation.

'If we do not hear from [taxpayers] by then, we may start an investigation into their tax affairs supported by our statutory powers.'

UHY Hacker Young said HMRC will be able to collect far more in fines by launching investigations into taxpayers who have not made disclosures either under the UK tax deal with Switzerland or the Liechtenstein Disclosure Facility (LDF).

It added taxpayers who have any undisclosed liabilities relating to offshore accounts should seriously consider making a full disclosure immediately.

Roy Maugham, tax partner at UHY Hacker Young, said: "These letters are a warning shot. Taxpayers who fail to respond can expect the heavy artillery to follow."

"The noose is tightening. Taxpayers with undisclosed liabilities arising from funds offshore should seriously consider making a voluntary disclosure as a matter of urgency"

New penalties for offshore tax evasion came into force on 6 April 2011. From the 2011/12 tax year onwards, taxpayers could face fines of up to 200% depending upon the location of the funds.