Howarth said that Hacienda is now “routinely investigating” all forms of investment and pension income from overseas and that in this case he believed it “is acting on the basis of information supplied by banks in the jurisdictions concerned.”
He works with Afimar accountants in the Costa del Sol town of Fuengirola and is telling those who have undeclared income to “review their position and, if appropriate, to make the most of the tax amnesty announced by the Spanish government.”
The amnesty, which runs until 30 November 2012, allows people to admit to undeclared assets and pay a nominal 10% tax rate.
He said: “A number of clients have reported receiving letters about their offshore bank accounts. It is the first time we have seen the Hacienda using information supplied by a tax haven to pursue tax on undeclared income. The Hacienda has also sent enquiries based on information received from other OECD tax authorities.
“This might affect both residents who have offshore accounts and those who are claiming non-residence but have told their bank they live in Spain. We would advise anyone concerned about their tax liability to resolve matters while the amnesty is in place rather than wait to be caught out.”
Measures to tackle Spain’s ‘hidden economy’ also include rules obliging people who set up overseas investments to notify the tax authorities and a ban on cash payments of €2,500 euros or more, he said. In addition, the Organisation for Economic Co-operation and Development (OECD) now requires all member states to routinely and regularly swap all information relevant to personal taxes.
Howarth said he is also convinced it is only a matter of time before the Hacienda begins to use Land Registry records to pursue those with properties in the UK: “The world is becoming smaller and more transparent. People need to put their affairs in order now or potentially face tough penalties.”
