A6.1212 Offshore specialist investigation unit
Some attempts by HMRC to obtain information and mount investigations relating to the use of offshore structures have in the past been thwarted, as certain offshore centres structure themselves to provide secrecy and anonymity of funds. Legislation which has increased the exchange of information with other jurisdictions has therefore been particularly helpful to HMRC (see A6.1204, A6.1205).
HMRC consider that a major threat of serious fraud arises from the use of offshore accounts and structures and they point to increasing numbers of more complex arrangements involving higher values of fraud and growing evidence that taxpayers have exploited the services offered by financial institutions to conceal funds offshore. In a three-year period, approximately 25% of the serious fraud cases investigated by SCO (now SI), involved the use of offshore structures and accounts to evade tax.
A major report by the National Audit Office (NAO)1 some years ago recommended that:
'“[HMRC] should continue to work closely with the banking and credit card industry to tackle the problems associated with offshore accounts and structures and realise the benefits of the new reporting requirements.”'
The report further recommended that more and better publicity should be given both to the fact that funds concealed offshore were increasingly likely to be investigated and to the results of successful investigations and prosecution.
The Offshore Fraud Project Group (OFPG) was established in response to those recommendations and as part of HMRC's stated determination to