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The case of Mr F

Mr F approached us because he was concerned that the details of an offshore bank account held by him for the previous seventeen years had never been declared to the Inland Revenue. The money in the account at the time of our meeting was in excess of £350,000.

We were able to construct a detailed history of the account from 1999 when the first statements were held to the current date and showed details of the interest received, and any deposits held into the accounts were transferred between them.

We knew what was in the account in 1999 because we had bank statements to that point, but we then had to reconstruct how that sum of money could have arrived in the account based on the interest rates accruing on the account during the previous ten years, details of specific deposits that the client was aware he made into the account and then other deposits which had been taken from his taxed income. This amounted to almost sixty pages of calculations.

On this basis we were able to establish that interest on the account over the seventeen years was approximately £159,000. The interest was all received gross as it was from an overseas account and we therefore calculated what the unpaid tax was, interest for the late payment of that tax and we were able to negotiate a settlement with the Inland Revenue with a 10% penalty bearing in mind that the penalty could have been as much as 100% of the tax liability.

The overall settlement with the Inland Revenue was in the region of £50,000.