HMRC officially kicks off second tax amnesty
Taxman confirms details of offshore tax disclosure opportunity, as tax advisors react to the terms of the scheme
Taxman confirms details of offshore tax disclosure opportunity, as tax advisors react to the terms of the scheme
HM Revenue & Customs has confirmed the details of a new disclosure
opportunity designed to encourage taxpayers with unpaid taxes linked to offshore
accounts to voluntarily disclose.
The amnesty also relates to unpaid taxes on assets, with an incentive of
reduced penalties key to the regime.
Under the terms, taxpayers who make a disclosure between 1 September 2009 and
12 March 2010 will qualify for a 10% penalty if they are not customers of the
five major retail banks targeted in the 2007 amnesty. These taxpayers will be
subject to a 20% penalty.
Stephen Timms, financial secretary to the Treasury, said: ‘I would urge
anyone with offshore accounts holding untaxed income or gains to take advantage
of this simple and straightforward scheme. Most offshore investors already pay
the tax that the law requires and it’s only fair that everyone respects the
rules.’
Dave Hartnett, permanent secretary for tax at HMRC, confirmed this will be
the final opportunity for taxpayers with unpaid tax to voluntarily disclose
under the favourable penalty structure.
Paul Roberts, head of tax investigations at Grant Thornton, said: ‘Tax
evaders who knowingly avoided disclosing their assets under the initial 2007
amnesty in the hope they would not be caught are likely to be feeling the heat
now.
‘In some extreme cases, individuals could face penalties of up to 100% of the
tax due and in exceptional circumstances, a criminal investigation could follow.
If any taxpayer in this situation receives a letter from their bank, they should
consider taking advantage of the NDO or face serious consequences.’
According to Sue Holmes, head of tax investigations at Smith &
Williamson, any taxpayers who attempt to avoid detection by the tax
administration should ‘think again, as HMRC will certainly be looking to
prosecute those who choose to ignore this last chance’.
Chas Roy-Chowdhury, head of taxation at ACCA, said HMRC will ‘dig a lot
deeper if people do not disclose any unpaid taxes, and will use its legal power
to seek information from banks’.
Andrew Watt, managing director of tax disputes and investigations at Alvarez
& Marsal Taxand, said: ‘Never before has a tax amnesty been undertaken on
such a huge scale. The NDO is different to the previous amnesty in that it
covers both customers of offshore banks and those of all building societies and
financial institutions which provide offshore accounts or structures.’
Further Reading:
Low
profile may limit amnesty’s success tax
HMRC
holds private talks with profession over tax amnesty
Exclusive:
Taxman pursues blanket bank disclosure notice
Second
amnesty badly timed, say tax experts