Two Britons were arrested for using HSBC Swiss bank accounts to evade UK taxes, which could lead to the first criminal prosecutions in HMRC's three year crackdown on offshore tax evasion. Additionally, WikiLeaks obtained information about 2,000 wealthy individuals and corporations with accounts at Bank Julius Baer in the British Virgin Islands from a former employee, which it may publish after verifying the details. This continues to underline HMRC's desire to stamp out offshore tax evasion and signals increased criminal enforcement.

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2. It has recently come to our attention that two
Britons have been arrested on suspicion of using
Swiss Bank accounts held with HSBC to evade UK
taxes. This could lead to the first criminal
prosecutions in a three year clampdown on offshore
tax evasion by HMRC.

3. According to our source, HMRC made the
arrests late last year and both individuals have been
released on bail pending charges. These arrests are
thought to have resulted from the review of the
information stolen from HSBC’s private bank in
Zurich by Herve Falciani, a French software
engineer, which contained account information
pertaining to 6,600 accounts held by UK residents.

4. This significant development once again
underlines HMRC’s desire to stamp out tax evasion
linked to funds retained in offshore accounts and
signals a hardening of HMRC’s attitude. News of
these arrests may counter the concerted criticism of
HMRC’s crackdown on tax evasion. Some
commentators have accused the taxman of shying
away from mounting criminal prosecutions and the
deterrent message that they convey to the tax-
paying population. We will of course keep you
updated on this development.

5. In a similar vein, news reached us yesterday that
the whistle-blowing website WikiLeaks has been
provided with a raft of information concerning 2,000
wealthy individuals and corporations that held
accounts with Bank Julius Baer in the British Virgin
Islands tax haven. Rudolf Elmer, who was previously
employed by Julius Baer to oversee the Caribbean
operations of the Swiss Bank for eight years until he
was dismissed in 2002, handed over the discs to
WikiLeaks founder Julian Assange during a press
conference. Mr Assange has promised to publish the
details once the information has been verified. WLH
understands that WikiLeaks is taking legal advice on
what information they can release, but it is likely that
the website will not hold back as evidenced during
previous high profile “leaks.”

6. Rudolf Elmer is currently standing trial accused
of coercion and breaching banking secrecy laws in
Switzerland and his motive in supplying this
information is to expose mass potential tax evasion.
He told the Observer newspaper last weekend that
those named in the documents come from “the US,
Britain, Germany, Austria and Asia, and include
business people, politicians, people who make their
living in the arts and multinational companies-from
both sides of the Atlantic.” It is unclear whether
HMRC has been passed this information, however it
is clear that the taxman will be monitoring
developments very closely. It is also likely that those
individuals who might be affected and have tax
issues stemming from the ownership of such
accounts may be seeking urgent professional advice.

7. This development reinforces the message that if
you have an undeclared offshore account, then you
should come forward voluntarily and resolve the
issue before HMRC comes calling. It is no longer an
option to bury your head in the sand and hope it will
all go away.
We will update this story as it develops, however
should you require any further information, please do
not hesitate to get in touch