Advisers hold the key to success of offshore amnesty

Tax haven: Jersey

Tens of thousands of offshore account holders in up to 500 banks may be targeted by the taxman in the second stage of its campaign to tax funds being held overseas, but the success of the whole project could depend on the guidance depositors receive from their advisers.

Accountancy Age learned last week that HM Revenue & Customs would be writing to the banks asking for account details by the end of March, and that the number of institutions to be targeted would run into the hundreds.

The taxman is then expected to offer some form of amnesty, referred to as an offshore disclosure facility, in return for voluntarily disclosing how much money they have offshore. The first offer last year netted around £450m in extra tax revenues.

But according to Louise Somerset, tax director at RBC Wealth Management, making the project work could rely on how tax advisers relay the terms of the amnesty to their clients.

She says all long-standing clients of RBC Wealth Management disclosed the information sought by HMRC during the first amnesty in 2007, and the focus will now switch to newly-acquired clients.

‘We’ll be talking to our new clients about the risk and checking whether there’s anything to disclose. When the terms of the second amnesty are announced, we’ll be asking new clients if they have anything that needs to be disclosed and our advice to them is certainly to disclose any information on accounts held offshore,’ she says.

Several changes in tax rules have been introduced since the 2007 amnesty, including the adoption of new tax information exchange agreements which could affect the need for some clients to voluntarily submit the information to HMRC.

RBC is not expecting an influx of clients enquiries from the second amnesty, with Somerset conceding the business would be in an ‘extremely difficult position’ if clients were unwilling to disclose details.

Somerset says the success of a second amnesty is underpinned by HMRC adequately publicising the scheme, and ensuring all taxpayers ­ not just those represented by an accountancy firm ­ are aware of their obligation to disclose.

‘Part of the problem last time around was there wasn’t much information made available and it’s concerning that the same thing could happen again. All HMRC have done is publish a small paragraph in the pre-Budget report. If they require people to take advantage then they have to make it more public,’ she says.

The first amnesty targeted an estimated 100,000 taxpayers with accounts held by these banks, of which 60, 000 voluntarily disclosed information under the terms of the scheme.