UK Offshore Accounts Holders Warned In HMRC Podcast

by Jason Gorringe, Tax-News.com, London

28 August 2009

Dave Hartnett, HM Revenue and Customs’s (HMRC) Permanent Secretary for Tax, has warned in a new podcast launched on August 25 that anyone with undeclared offshore tax liabilities faces an increased risk of prosecution if they fail to disclose during the New Disclosure Opportunity (NDO).

Under the NDO, people making a complete and accurate disclosure of their untaxed offshore liabilities between September 1, 2009 and March 12, 2010 will have any penalty capped at 10%, or 20% if they failed to take up a written offer of a capped penalty under HMRC’s 2007 Offshore Disclosure Facility (ODF).

In the podcast, Dave Hartnett emphasizes that penalties will be “much higher than 10 or 20%” for those who don’t come forward, and stresses that “there will not be another chance” to do so.

Once the NDO disclosure window closes, those taxpayers who have not come forward but are found to have unpaid tax liabilities will face penalties of at least 30% rising to 100% of unpaid tax.

“This time,” he warns, “we are going to have information from the majority of banks operating in the United Kingdom. So, we’re going to have a much bigger database from which to work.”

On August 12, the Tax Chamber of the First-tier Tribunal ordered over 300 banks to give details to HMRC about their customers who hold offshore accounts. The ruling has allowed HMRC to issue information notices to banks ahead of the NDO.

To use the NDO a notification of the intention to disclose must be made to HMRC between September 1 and November 30, 2009. Those notifying on paper can do so from September 1 to November 30. Those notifying electronically can do so from 1 October to 30 November.

Disclosures can then be made on paper from September 1, 2009 to January 31, 2010 and electronically from October 1, 2009 to March 12, 2010.

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