HMRC has announced that it is investigating UK taxpayers with connections to Euro Pacific Bank (EPB), which is based in Puerto Rico. The bank suspended its operations on 30 June 2022 after the Puerto Rican authorities issued a cease and desist order.
In 2020, an unprecedented global investigation was launched by the Joint Chiefs of Global Tax Enforcement (called the J5) following suspicions of tax evasion and money laundering by bank customers.
It is highly likely that HMRC already has a raft of information on the accounts held with EPB even though the bank did not participate in the automatic exchange of information, an initiative introduced by the OECD in 2016.
The head of HMRC’s Fraud Investigation Service, Simon York, has confirmed that there are already a number of criminal investigations ongoing into UK taxpayers connected with the bank.
People who have historically held accounts with the bank and wish to better understand what this means for them should seek specialist advice straightaway to ensure their tax affairs are up-to-date.
Even if their tax affairs are in order, it is expected that HMRC will contact UK customers of the bank to check if there is anything that needs to be declared. It is important to remember that HMRC’s investigators are trained to critically analyse the information they hold and identify where tax may be at risk due to anomalies or irregularities in their customers’ financial affairs. This might be a ‘nudge’ letter to encourage the person to check their tax affairs are up-to-date or in the most serious cases, a HMRC letter informing the recipient that they wish to interview them under caution – a clear sign that a criminal investigation is ongoing.
HMRC is urging people to come forward now and make a voluntary disclosure of any unpaid taxes. Choosing the best route is key here. HMRC provides a digital disclosure service, called the Worldwide Disclosure Facility, to allow individuals and businesses to disclose unpaid taxes linked to assets or interests held overseas.
In more serious cases, where there is a concern that HMRC might consider there to have been tax evasion, people may wish to consider an alternative route, called the Contractual Disclosure Facility (CDF). This gives the individual 60 days to provide a valid outline disclosure of the tax owed along with a signed statement that the person has made a full disclosure.
HMRC undertakes not to instigate a criminal investigation if people comply with the terms of CDF. This is a specialist area and Moore Kingston Smith can assist with all aspects of the disclosure, including how to ensure that the individual resolves the issue in the most efficient way while minimising their exposure.
Moore Kingston Smith has a deep understanding of how HMRC deals with this type of disclosure and the routes available to UK residents to resolve historical tax issues. If you think you might have been affected by this announcement and would like a confidential, no obligation chat with us, please contact John Hood on 020 7566 3717 or via email on email@example.com.