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Last July, John Cassidy, a tax partner at PKF, wrote an article in Taxation on the offshore disclosure facility, concluding that 'a huge number of new investigations should be expected'.
His remark now seems highly prescient as HMRC, following its successful investigation into the big five high street banks, is broadening its focus to seek the cooperation of 170 second-tier financial institutions, in a 'filtering-down exercise' aimed at the wealth managers with the largest number of offshore accounts.
The move against small private banks 'fits together' with the ongoing clampdown on accounts in locations such as Isle of Man, Guernsey and Jersey, said John.
He went on to remark that 'following the judgment against the high street banks, there's no reason HMRC shouldn't make this latest move. David Hartnett [HMRC's director general] promised it, and now it's happening'.
He added: 'Lower-tier institutions have always been regarded as the places where the real money is to be had. I don't think anyone knows what HMRC stands to recoup, but it looks to be in the billions, not millions.
'After all, there are only five high street banks, and they tend to have lots of small accounts. But there are many smaller financial institutions, and their clients are typically extremely wealthy.'
Other senior tax experts are in agreement with John Cassidy. The head of PricewaterhouseCoopers' tax investigations, Stephen Camm, claims the latest inquires make sense.
He said: 'HMRC looks to audit the financial firms that have a high potential of being the most profitable for its efforts in terms of the amount of tax being avoided'.
