British people and expats with accounts with international banks in the Channel Island of Jersey are facing confusion over a global clampdown on tax avoidance and money laundering.
The move is a result of a series of high profile cases in which banks have been investigated over allegations that offshore or foreign accounts have been used to avoid or evade tax.
Many of those involved in the high profile cases have been exceptionally wealthy with bank accounts around the world but now ordinary people are being affected.
One bank, HSBC has confirmed that it has been checking the identity and addresses of customers with accounts in Jersey, in particular those living in UK but with no connection with the island.
‘We have been reviewing the details we hold on our customers to ensure we have the information we need to protect them, together with wider society, against fraud and other financial crime,’ HSBC said in a statement.
‘Whilst we cannot comment on individual cases, HSBC has implemented numerous standards designed to prevent its banking services being used to evade taxes or launder money, and we have exited clients who do not meet those standards or where we have concerns in relation to tax compliance,’ the statement explains.
‘Keeping accurate, up to date information on customers such as complete proof of identity, or address, helps us monitor transactions effectively for potential fraudulent activity,’ it added.
HSBC Expat, which provides accounts for expats around the world is not affected and a spokesman said there will be no knock-on effects for expats. Other banks such as the Royal Bank of Scotland and Barclays are also understood to be reviewing their processes.
John Harris, director general of the Jersey Financial Services Commission, said that moves by banks take to manage risks and comply with international standards should be welcomed.
But ordinary account holders are concerned. Customers of HSBC in Jersey have been sent a letter saying: ‘We’ve taken the difficult decision to close all Jersey accounts for customers who don’t live there. This is to comply with HSBC Group standards’.
It also advises them to attend their local branch with identification. A chef working in Jersey but living in France said she had been told to close her account as she does not have an address in Jersey, according to reports on the island.
A student in Jersey said he had been sent three letters in a month saying he must attend his branch or his account would be closed down.
HMRC, the UK taxman, confirmed that it has received a data set relating to HSBC Jersey account holders. A spokesman pointed out that UK taxpayers with undisclosed assets in Jersey accounts have until the end of September next year to take advantage of a disclosure facility which allows them to settle any liabilities with HMRC on beneficial terms.