New offshore disclosure opportunity
HMRC has confirmed a new offshore disclosure opportunity for taxpayers with unpaid taxes linked to offshore accounts or assets. The New Disclosure Opportunity (NDO) will be available to taxpayers who make complete and accurate disclosures before 30 November 2009.
The facility to formally use this facility will not be available until the start of September 2009. Taxpayers who notify HMRC before 30 November will have until 12 March 2010 to submit full details of their disclosure. This is not an amnesty so all outstanding taxes will be payable in full together with interest as regards the late payment. The reason for utilising this facility is to ensure that the penalties are capped at 10% – as compared with a minimum of 30% thereafter.
The reduced penalty of 10% will be levied for full disclosure where no previous disclosure opportunity had been available to the taxpayer. A higher penalty (of 20%) will apply to taxpayers with accounts at Barclays, HBOS, HSBC, Lloyds or RBS. This is because they were offered the chance to resolve matters as part of the Offshore Disclosure Facility (ODF) in 2007 but did not make a disclosure.
The NDO is expected to be the final disclosure opportunity for taxpayers to make disclosures of unpaid taxes. It principally relates to the interest on offshore accounts and also to any tax due on the deposits in so far as these are derived from previously undisclosed taxable profits or capital gains.
Taxpayers who do not make full disclosure by 12 March 2010 and are later found to have undeclared tax liabilities will face penalties of between 30% and 100% of the tax evaded as well as an increased risk of criminal prosecution.
Taxpayers who currently have undisclosed taxable income (for example in accounts in offshore banks) are advised to take action immediately.