HMRC investigates offshore accounts
The recent UK coverage of HMRC’s investigation into Euro Pacific bank has been somewhat restrained. Whilst one might speculate why the UK press doesn’t go into all the details of Project Atlantis already published in Australia or the USA, the unprecedented video address made by HMRC’s Simon York last month has made a real impact. HMRC’s announcement that there will be hundreds of investigations, some of them criminal, has been widely reported, with further details being covered in a CIOT statement issued on 4 August 2022.
HMRC has been working on this investigation for over two years. Those interested in the background would do well to listen to the June 2020 Australian Tax Authority (ATO) podcast jointly led by Simon York with his Australian and US counterparts. Will Day of the ATO then spoke of how the combined J5 investigation of Euro Pacific had “at its heart what in my view was an abuse of correspondent banking arrangements”. Don Fort of the IRS also revealed that a US special agent was then working full time with the ATO on what was a globally coordinated investigation. As regards the UK aspects, in the recent joint J5 statement of June 30 2022 Simon York stated:
“We know this bank has hundreds of UK customers. We already have a series of live tax enquires full criminal investigations and intel operations into what we think are the most serious frauds – and many more planned”
As to why HMRC already knows that there are hundreds of UK cases, the foreign press coverage likely provides the answer. The New York Times coverage suggests that a major UK bank acted as correspondent bank (i.e. acted as the bank that facilitated the transfer of funds). The same coverage also identifies a UK adviser who marketed Euro Pacific in the UK. Given that all this was reported nearly two years ago, HMRC has likely already used its formal powers to obtain information from banks and advisers in the UK.
According to todays’ CIOT’s statement, HMRC’s initial letter campaign will commence next week, on 8th August. Those UK taxpayers with connections to Euro Pacific would do well to take specialist advice urgently: HMRC already knows who they are.
