Pictured above: Paul Malin

Few people relish their tax affairs being caught in the spotlight, let alone when they are told that they are part of a "project", an expert has warned.

Paul Malin, director of tax investigations at the Birmingham office of BTG Tax, part of the Begbies Traynor Group, said the rich and famous with homes and bank accounts around the world, could all too easily be targeted by HM Revenue & Customs.

"To some, such a lifestyle is to be envied. To others, it is a cross they have to bear," said Mr Malin. "Anyone can have complicated tax affairs but for some it is the natural progression having achieved a certain status. Having generated a particular level of wealth, taxpayers do well to recognise the need to seek ongoing professional tax advice and better still to follow that advice."

Such individuals are constantly under the scrutiny of HMRC's dedicated High Net Worth Unit.

They are not all pop stars and footballers but also the likes of ordinary people who have inherited wealth or entrepreneurs who have done well. They do not generally flaunt their wealth.

Some may have created offshore mechanisms to avoid tax or to protect the family's wealth. Such mechanisms are now to be challenged.

"This group of taxpayer are not tax evaders - they simply have complicated tax affairs. They may legitimately take part in tax mitigation schemes and so already face some scrutiny from that perspective already," said Mr Malin.

Those under the intense watchful eyes of the HNWU are more likely to be targeted as a project in which the Land Registry may be used as a source of information.

"Directorships of UK companies are generally cross referenced at Companies House but not so for property owners at the Land Registry. To get the same background information, each property has to be looked up and a note made of the owner's details before any questions can be asked of how the property might have been funded or whether the proceeds are taxable or not " said Mr Malin.

Only recently the Deputy Prime Minister Nick Clegg announced that the coalition government is considering the introduction of a new rule "to ensure that wealthy individuals pay their fair share of tax".

Mr Malin emphasised that all is not lost for taxpayers finding themselves under investigation as a result of such projects.

"If you owe tax then it follows that you owe interest on late payment of that tax and a financial penalty equivalent to up to 100 per cent of the tax. By definition, any penalty may prove very costly indeed and every effort should be made to protect the taxpayer in these circumstances.

"A way forward could be to consider the Liechtenstein Disclosure Facility - if you meet the requirements - which would mean you could cap any tax geared penalty at just 10 per cent."

For more information about Begbies Traynor, please visit their website here: www.begbies-traynorgroup.com