HMRC reveals tax 'amnesty'

A tax 'amnesty' for offshore account holders has finally been announced by HM Revenue & Customs, after weeks of conjecture about how the taxman would deal with customer details obtained from the major UK banks.

HMRC has set up an offshore disclosure facility to enable potentially hundreds of thousands of tax evaders to pay tax.

The payments will have to include the full tax and interest for up to the past 20 years, but penalties will be set at 10%. Those who continue to evade their tax liability will be hit with a higher penalty, up to 100% of the tax owed, and could face prosecution.

The taxpayers must notify HMRC by 22 June that a disclosure will be made. They then have to make the full payment by 26 November.

HMRC has estimated it could make a £1.75bn haul from the scheme.

'One of the worst-kept secrets is now out, and I'm expecting the scheme to be successful,' said Mike Warburton, senior tax partner at Grant Thornton .

Based on the success of Ireland's tax amnesty, Warburton predicts HMRC could bring in revenues of £5bn.

'As I've said before, HMRC doesn't want to overstate what it could bring in,' he said. 

Further reading:

Advisers move to snatch tax amnesty work

Offshore amnesty within days

Doubts emerge over HMRC’s £1.5bn Barclays tax haul