HM Revenue & Customs now has new powers to pry, an expert has alleged.

Jeff Millington, senior tax manager at BGT Tax in Birmingham, said mention of a consultation document had been hidden in last week’s Pre Budget Report.

He said: “Slipped in under the heading of offshore tax evasion it will give HMRC the right to request the disclosure of certain new bank accounts opened offshore.

“The opening of a bank account, offshore or otherwise, is not necessarily the initial step into a career in tax evasion. The fact that HMRC is seeking to obtain the rights to make UK taxpayers disclose when they have opened certain offshore accounts looks to be a significant increase in their powers to pry into the lives of the public.”

Mr Millington said the first and obvious question to ask was “which accounts will they want disclosures about?”

He went on: “It is likely that any country on the grey or the black list of the Organisation for Economic Co-operation and Development will be an automatic trigger for disclosure, but what about the Channel Islands or Switzerland? These countries appear on the white list and have recently entered into Tax Information Exchange Agreements.

“It would seem likely that HMRC will not require people to disclose a new account in these jurisdictions. It will expect people to disclose new accounts opened in countries where no TIEAs exist, subject to a threshold of £25,000.

“This may also include people who have closed an account in Liechtenstein since August 10 and with the closing funds opened a further account in other jurisdictions. This is a wide definition but the one obvious flaw in the recent Memorandum of Understanding between Liechtenstein and the UK, is that up until March 31, 2015 people can close their bank accounts in that country and move the funds elsewhere. This will enable them to avoid having to make a disclosure to HMRC under the Liechtenstein Disclosure Facility.

“So what a very clever way to shut off this particular loophole by making that very act something that has to be disclosed. Whilst many people may do this and ignore the potential consequences it does tighten the net on those bent on tax evasion. And when HMRC catches up with those evading their taxes the level of penalty could be as much as twice the tax avoided.

“This, coupled with the fact that HMRC is going to start inquiries into people with offshore accounts from January, means the focus really is getting sharper on overseas assets. Those who do have something to disclose should seriously consider coming clean.”

His comments came as Andrew Shaw, national tax managing partner at BTG Tax, predicted a VAT rise next year whoever wins the upcoming General Election.

He charged: “A rise of VAT of 2.5 per cent raises £12 billion so it is not a question of if, but rather of when.

“Our VAT rate is now the second lowest in the EU and the only one to have decreased in the last year, whilst six countries have raised their rates. So expect a new Government in 2010 to refer to harmonising rates in Europe to cover up the rise in VAT.

“Indeed, by chance Alistair Darling said the Bank of England expects inflation to be undershooting the two per cent target by mid 2010, so what a handy time to raise VAT. When you need to issue so much debt it is great to get some inflation into the system as it devalues the debt you issue.”