05 May 2006
Revenue & Customs officials have won an important legal battle that ensures British banks must hand over details about offshore customers to tax collectors.
A landmark legal ruling by special commissioner John Avery Jones means that Barclays, one of Britain's largest banks, must hand over details of UK-domiciled customers who hold offshore accounts, such as those based in the Channel Islands.
Such data are expected to give indications of customers who have not paid tax on the interest earned on their accounts, Revenue sources said.
But the commissioner's ruling, announced on May 2, is likely to extend far beyond Barclays to other banking organisations and could yield billions of pounds in revenue due to the Exchequer.
Barclays said the ruling was 'very much an industry [wide] issue' and claimed that 'other institutions have been approached' by Revenue and Customs.
Although it is legal for UK banks to provide offshore accounts and for UK customers to hold them, it is illegal for such customers to conceal interest earned. However, Revenue & Customs officials have long been thwarted in their attempts to access data on offshore customers.
A departmental spokeswoman told Public Finance: 'The major implication [of this week's ruling] is that for the first time we have won the “power and possession” argument on offshore accounts - whereby the financial institution has the records within their possession and the power to provide them to Revenue & Customs.
'This action is about fairness and about creating a level playing field for all taxpayers. We will continue to ensure that all monies located offshore are lawfully taxed.'
PFmay2006
