Offshore Co-ordination Unit

HMRC have set up a special team called the Specialist Investigations Offshore Coordination Unit (OCU), as part of the crackdown on tax evasion linked to tax haven bank accounts and assets.  The Birmingham based team's main task is to start tax investigations into the 10s of thousands of offshore bank account holders on whom they have obtained detailed information.

The taxman's Offshore Coordination Unit has acquired masses of information about offshore bank accounts held by UK residents. The OCU is currently writing to all these individuals.  The letters are usually headed “Offshore Bank and Building Society Accounts”, and state that the taxman holds information that the recipient has, or previously had, a direct interest in, or a connection to, overseas accounts or investments.  Because of this Her Majesty's Revenue and Customs believe that the recipients may not have disclosed all their tax liabilities in respect of those accounts and investments: or in relation to the initial capital deposits.  Recipients of the letter are told that they have only 30 days to reply; after which HMRC may start a detailed tax investigation into their tax affairs, supported by its wide ranging statutory information powers.  Anyone who does not respond to HMRC in good time and accurately faces an intrusive tax investigation: possibly on criminal lines.  The OCU is a branch of HMRC's elite Specialist Investigations Unit.

Some cases are likely to be conducted under the Code of Practice 9 Contractual Disclosure Facility (cases where HMRC suspect tax fraud) procedures; although at first most of the cases will be worked internally by the Offshore Coordination Unit.  The OCU is staffed by experienced and technically trained tax inspectors: usually with experience from the elite Specialist Investigations unit or from Local Compliance Fraud teams.

The letters will usually include some information about some of the accounts of which HMRC are aware: e.g.  HSBC Jersey, HSBC Private Bank (Suisse), HSBC Republic bank (Suisse), Republic National Bank of New York (Suisse), and Safra Republic Bank.  However, HMRC will expect full disclosure of any other offshore accounts, assets or investments.

Tax Amnesties
Anyone who gets a letter from the OCU relating to countries for which there is already a tax amnesty in place (e.g. Jersey, Guernsey, Isle of Man, Switzerland), are no longer allowed to use those advantageous disclosure facilities.  However, the most favourable tax amnesty, the Liechtenstein Disclosure Facility, is still available: and it comes with the added bonus of guaranteed immunity from prosecution. This is a specialist area where we can advise further.

OCU Certificates
Some of the OCU letters require the completion of one of 3 certificates.  HMRC will check if the statements on the certificates are correct; and warn that false statements could result in prosecution. Anyone who does not respond to HMRC in good time and accurately faces an intrusive tax investigation: possibly on criminal lines. Once the initial certificates have been signed and returned, the Offshore Co-ordination Unit will allocate the case according to the degree the size and seriousness.  Anyone certifying that they are going to make a disclosure will be contacted by HMRC; who will set out the scope of the full disclosure.

What does this mean for me?
If you have received a letter regarding offshore investments from HMRC's Offshore Coordination Unit, then you need your own tax investigation specialists to help you immediately.  You may have no tax irregularities to disclose.  Or you may need to make a detailed disclosure.  Both of those issues will be dealt with at phase 2 of the investigation.  However, it is imperative that your advisor makes early and positive contact with the OCU; so as to avoid an intrusive and potentially damaging tax enquiry.  Generally the Liechtenstein Disclosure Facility affords significant savings, if that route is used.

How can Lynam Tax Offshore Disclosure Experts Help?
Lynam Tax investigation experts have substantial experience of the key issues.  We routinely deal with tax investigations and tax disclosures regarding offshore bank accounts and assets.  We deal with HMRC Specialist Investigations on a daily basis.  We are already helping many clients and their agents with the current tax amnesties, including a significant number of cases dealt with under the Liechtenstein Disclosure Facility; the Swiss Tax Agreement; and investigations being carried out by the Offshore Co-ordination Unit.  We can help you get the maximum benefits (e.g. the LDF), and avoid the severe risks of making an incomplete or inaccurate disclosure.

For a free, private, no obligation consultation, don't delay.  Call Paul or Andrew today on 0845 643 9997

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