Deadline for offshore amnesty extended

The taxman has announced an extension to the deadline on its amnesty for
individuals to come forward with tax liabilties arising from offshore bank
accounts.

The offshore disclosure facility – or NDO – will now run until 4 January
instead of closing on 30 November.

Reaction from advisers was prompt. Gary Ashford, national head of tax dispute
resolution at RSM Bentley Jennison said he was not surprised by the move.

“It was always going to be a tight deadline for banks to inform their clients
that account information had been passed to HMRC and an even tighter deadline
for clients then to be able to make an informed decision to contact the
authorities.”

308 banks were contacted by HMRC to disclose details of overseas account
holders. Those individuals now have until the New Year deadline to come forward
to give notice that they have potential liabilities. Meeting the deadline means
account holders can pay their unpaid tax with a lesser penalty. The final
deadline for payment remains 12 March 2010.

John Cassidy, tax investigations and dispute resolution partner at PKF
Accountants & business advisers, called for an extension to the deadline
early this week and commented: “This extension shows that HMRC is finally taking
a common sense approach to making this amnesty work.”

HMRC is expected to make good use of the next five weeks by writing to more
individuals holding offshore accounts: to date it has only written directly to
around 35,000 offshore account holders, PKF said.

John Cassidy added: “Most of the banks that HMRC has approached for account
holder details have yet to supply them – there could be another 150,000
individuals for HMRC to contact.

“This is vital because, my experience shows, that only a personal letter from
HMRC really motivates people to come clean on tax inequalities – the more people
they can write to before 4 January, the more money the amnesty will collect.

“We have had more enquiries about the NDO in the few days since the first
batch of HMRC letters arrived than in the whole period since the NDO started on
1 September – with every individual mentioning a letter from HMRC.”

Ashford also chairman of the CIOT’s Management of Taxes Sub-Committee, added:

“This is a sensible and realistic move which recognises the lack of time
under the original deadlines. As we envisaged, there hasn’t been enough time to
sort out all the information from the various banks.”

“The new deadline should work, even if it might mean an uncomfortable
Christmas for some taxpayers.”

The
Times reports this morning a poor response to the amnesty although many
advisers expect a last minute rush from clients attempting to meet the deadline
over the Christmas holiday.

This is the second amnesty run by HMRC. The first produced tax revenues of
£400m after 45,000 offshore account holders came forward.

Meanwhile, another for account holders in Liechtenstein has also reportedly
seen little enthusiasm from account holders. The Times reports fewer
than 30 individuals have come forward to declare income held in accounts based
in the principality.

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