Of all the pieces that will help shape HM Revenue & Custom’s efforts to
persuade people to declare income on funds held in overseas accounts, the one
most advisers have been waiting for is the penalties that will be imposed by the
HMRC first launched an amnesty for holders of overseas accounts in 2007. This
was for accounts held with the five major retail banks. What the taxman wanted
was for account-holders to declare what interest they had earned on the funds
held offshore. Failure to come forward earned a penalty of 10% of the
outstanding tax plus interest.
Details of a second amnesty have been emerging over the past few weeks. Among
the details revealed last week is that account holders in those banks would now
face a 20% penalty if they voluntarily come forward – a big increase on the
previous punishment. If they fail to own up and are found out the penalty will
rise to 30-35%.
But, many tax advisers remain skeptical about how HMRC is going to circulate
the message out to the estimated 50,000 people who might have tax liabilities to
The lack of publicity from the first round of disclosures in 2007 is
widely-touted as the reason for the £400m in tax revenue generated by the scheme
– a haul many experts regard as paltry, when estimates of a possible £1bn win
for the taxman had been reported.
Despite calls from the tax community for HMRC to aggressively promote and
publicise the next round of disclosures – scheduled to commence in September, a
public advertising campaign is yet to be launched.
Mike Down, chairman of Baker Tilly’s tax risk and investigations management
group, says: ‘I don’t think the first amnesty was advertised enough. They put it
on the website and relied on the profession to get the message out.’
A spokesman for the Chartered Institute of Taxation says: ‘The risk you run
if you don’t publicise it is people saying they weren’t aware, so maximum
publicity is needed. It prepares the ground for HMRC to come down heavier.’
A spokeswoman for HMRC says the department plans to ‘make people aware of the
opportunity through a publicity campaign. The major activity is timed to begin
at the same time as the NDO in early September.’
HMRC has estimated the disclosure opportunity could bring in approximately
£500m over four years, including £150m in 2009/10.
Steve Besford, tax associate at BDO Stoy Hayward, says the penalty structure
will create an ‘administrative headache’ for HMRC, as many taxpayers of the
major retail banks will argue they weren’t aware of the previous disclosure
Crowe Clark Whitehill , the top 20 accountancy firm, has announced the promotion of Chris Mould to partner
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said
UK-based non-doms have paid ten times more tax than the average taxpayer, raising concerns over the Brexit impact on non-dom contributions and therefore, the economy