Offshore bank accounts and credit cards

If you have stashed away money in an offshore bank account, without declaring the interest to the tax man and you use a credit card to make purchases or withdraw cash over here in the UK, beware!

The tax man (HMRC) has just won a case that will enable him to ask to see any relevant paperwork. If you have not declared these funds in the past you are then likely to be hit with a tax bill.

Special commissioner John Avery Jones, who heard the case, dismissed the argument that taxpayers’ basic rights and EU freedoms were being violated. “Had they associated their credit card with a UK bank account, the UK bank would automatically give the Revenue information about interest earned on that account every year, which is arguably more onerous than under the proposed Notice,” he said. “If the customers are deterred from opening offshore bank accounts and associating credit cards with such accounts …because the customers intend to evade tax I find it strange that it should be argued that the EU fundamental freedoms should assist them.”

The decision can be downloaded in full from the Finance & Tax Tribunals website.