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Expat Investor : April 2008
expatinvestor.com 4 EXPAT INVESTOR ? April 2008 Fast Facts 44132 Fast Facts 44130 NEWS NEW legislation, which came quietly into effect late last year, is poised to have a big effect on tax avoidance measures, says leading business and financial adviser Grant Thornton. Gary Ashford, a Director within Grant Thornton’s national tax investigations group, believes the UK’s HM Revenue & Customs (HMRC) is gearing up to clamp down on tax evaders and will use its new powers under the Police and Criminal Evidence Act 1984 (PACE 1984) to reclaim unpaid taxes. “After a lengthy period of consultation it was agreed that from 1 December 2007, certain provisions of PACE 1984 would apply to criminal tax investigations carried out by HMRC officers,” he says. “For HMRC this means new powers of search, seizure and arrest in relation to unpaid tax, as well as the ability to force banks, lawyers and accountants to hand over information in relation to perceived serious tax fraud. “It is interesting to note that HMRC is currently advertising for criminal investigation officers in London, Nottingham, Leeds, Manchester and Birmingham, which seems to indicate that those new powers will be put into use very soon.” One area the new regulations could be utilised with immediate effect is against those that came forward during HMRC’s Offshore Disclosure Facility (ODF). Early last year, following requests for information from High Street banks, HMRC offered a limited window of opportunity for taxpayers to get their affairs in order and disclose information left off their tax returns. “With the deadline having now lapsed, HMRC will now be risk- reviewing the disclosures they received for investigation. They will also be looking through the information they received from the five big banks to identify those who did not come forward,” says Mr Ashford. It’s also likely that HMRC will embark on a second ODF. They are targeting another group of around 150 financial institutions in a bid to gain further customer details. Given these new rules it seems likely that HMRC will be successful in obtaining customer information relatively quickly.” THE UK’s Office of Fair Trading (OFT) has publicised the top five ‘tricks of the trade’ used by scammers to con the UK public out of an estimated £3.5 billion a year. Although there are many different types of scam delivered through the post, by email, over the phone, or in person, most use the same basic techniques to deceive over three million UK consumers every year. The top five tricks identified by the OFT are: 1. Offering you the unattainable dream – scammers hook you by promising to fulfil your dreams and aspirations. You are told that you alone have been chosen because you are special, but in fact the same scam has been sent to thousands of other people. 2. Using official-sounding names and job titles or referring to important- sounding organisations to give a false impression that the scam comes from someone in a position of high authority who can be instantly trusted. This works by overcoming the initial gut feeling that something is not quite right. 3. Using fake deadlines to create a sense of urgency and a fear of missing out. You are told that if you don’t reply immediately the opportunity will be gone forever, triggering an impulse to respond before you have the chance to think the offer through properly. 4. Using fake testimonials from satisfied customers to reinforce the impression that the scam offer is genuine - this exploits people’s normal tendency to follow the crowd and helps to validate what is being offered. 5. Offering worthless ‘money back guarantees’ to convince you that you are dealing with a legitimate trader and that there is no risk in sending off your money. www.oft.gov.uk HMRC’s latest clamp-down on tax evaders Honesty is the best policy, says Friends Provident Nearly nine out of 10 Brits have always told the truth when completing an insurance application form, but 5% of people haven’t, OFT exposes scammers’ ‘tricks of the trade’ according to the results of the Protection Survey from Friends Provident, the FTSE 100 life and pensions company. At the opposite end of the scale, it’s a worry that one in five people would not read all the terms and conditions on a policy before they signed up. But for those who choose to be dishonest when applying for insurance, they may come unstuck, as over half of people surveyed (54%) thought if these people then claimed they should not be paid any benefits. And, of those who thought they should be permitted some payment of their claim, only 8% felt they should be entitled to a full payment, with 15% saying how much they should get depends on the type of information not disclosed. When it comes to buying life insurance just under half would do their research on the internet and through the media and more would ask a financial adviser (20%) for advice rather than their friends and family (15%). If people had a fiver each month that they had to spend on insurance, 28% declared they would choose life insurance followed by 17% who would opt for income protection. If they didn’t have to spend it on insurance, nearly a third would spend it on food.
May June 2008