HMRC Announces New Disclosure Scheme For Offshore Account Holders

by Jason Gorringe, Tax-News.com, London

18 April 2007

HM Revenue and Customs on Tuesday announced arrangements enabling investors with offshore accounts to disclose to HMRC any income and gains not previously included in their tax returns.

The UK tax authority explained that:

"HMRC has recently obtained information about holders of offshore accounts from a number of banks and has obtained similar details through the European Savings Directive."

The banks in question are thought to include Barclays, HSBC, HBOS, Royal Bank of Scotland and Lloyds TSB, according to reports.

HMRC continued:

"There is nothing wrong with holding an offshore account as long as you pay any tax due on the money deposited in it, and on the interest from it. If you have done this you do not need to use the Offshore Disclosure Facility."

"We want to encourage those with unpaid tax and duties to pay what they owe. Therefore, we are introducing the Offshore Disclosure Facility to help them get their tax affairs up to date."

The facility is open to those who hold or have held an offshore account, either directly or indirectly, that is in any way connected to a loss of UK tax and/or duty.

For a limited period, taxpayers can come forward and make a full disclosure of all undeclared liabilities, not just those connected with an offshore account. Personal disclosures or those made on behalf of others will be accepted under the terms of the Offshore Disclosure Facility.

There are two stages to the process, namely notifying HMRC of an intention to disclose, and making the disclosure and payment.

To use these arrangements, investors will need to notify HMRC by 22 June 2007 of their intention to make a disclosure and then make their disclosure by 26 November 2007.

After disclosure and payment, HMRC will acknowledge the disclosure and payment, and will inform taxpayers by 30 April 2008 if their disclosure has been accepted.

HMRC warned, however, that:

"At the end of the notification period, HMRC will target those with offshore bank accounts and undeclared tax liabilities who have chosen not to come forward to make a disclosure."

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