UK-based savers with money in savings accounts in European tax havens should make sure they don't unwittingly get caught in the net of a new clampdown on cross-border tax evasion.

Banks and other financial institutions with offshore bases in low-tax territories such as the Isle of Man and Guernsey, have begun writing to their clients making them aware of a little-publicised European Union savings directive, expected to come into force this July. Under the directive, finiancial institutions in EU member states will be required to hand over to the relevant tax authority information about savings income received by EU individuals not resident in the country where the account is held.

The information will be handed to the tax authority where the account holder is resident so that it can be compared with what has been declared on their domestic tax returns.

Payments affected include interest on bonds, savings certificates, term deposits, current accounts and savings accounts. Other types of income, including company dividends, pensions and rents are not considered to be savings income.