HMRC begin enquiring into affairs of users of Puerto Rican bank

Following a cease and desist order issued to Puerto Rican bank Euro Pacific International in June 2022, HMRC believes that hundreds of UK taxpayers have used Euro Pacific International’s services to facilitate tax evasion. 

HMRC is particularly interested in Euro Pacific International customers as Puerto Rico is not part of the Common Reporting Standard – an automatic exchange of information agreement across 100 countries. HMRC will want to understand whether taxpayers used the bank’s services because they did not believe their financial information would be shared with authorities.

HMRC action

HMRC has confirmed it’s beginning civil and criminal investigations into taxpayers who hold accounts with the bank, and has also issued ‘nudge’ letters to users of the bank to encourage taxpayers to review their affairs and consider if they need to make a voluntary disclosure via the Worldwide Disclosure Facility.

What should you do if you receive a nudge letter?

Do not ignore the letter. Recipients of nudge letters will be expected to check that all their worldwide income and gains have been disclosed correctly. Even if you’re confident that you have fully complied with your tax obligations, we strongly suggest that you consult a specialist tax adviser to help you review your position. If you ignore the letter, you may become the subject of an investigation, so it’s therefore important that you ensure your affairs are correct. 

If you have not received a nudge letter from HMRC, but still have links to Euro Pacific International, you should still consider whether you need to make a disclosure, ensuring you receive a maximum reduction of penalties in the eventuality there are taxes due.

What should you do if HMRC commences an investigation or enquiry?

If you receive a letter from HMRC notifying you of an investigation, it’s important that you seek professional advice as soon as possible. This advice may protect you from HMRC commencing a criminal investigation, in particular, if HMRC has begun a Code of Practice 8 or 9 investigation. Buzzacott’s experienced tax investigations and dispute resolution experts can ensure that you’re represented to limit your exposure to tax and penalties and that any investigation is dealt with swiftly and efficiently. 

How we can help

Buzzacott’s team can guide you through the appropriate disclosure process. Should you choose to get specialist advice from Buzzacott, we will:

• Conduct a full review of your tax affairs, identifying any issues that need to be disclosed, providing you with an initial view as to the extent of your exposure
• Where appropriate, register you for the Worldwide Disclosure Facility or Contractual Disclosure Facility 
• Prepare and submit a disclosure that ensures you don’t pay any unnecessary tax, interest or penalties
• Where appropriate, deliver a letter of representations to explain your position to HMRC to bring your disclosure to a swift conclusion
• If needed, negotiate a time to pay arrangement that is affordable according to your needs and personal circumstances

Buzzacott has a long-established and proven track record of ensuring that our clients receive the minimum financial penalty allowed by law. Our experts will then ensure your disclosure is dealt with seamlessly and that you are not exposed to any tax or penalties that you should not be.