Offshore tax disclosures
HMRC’s offshore disclosure scheme went online from 1 October. This is part of the New Disclosure Opportunity (NDO) that was announced earlier in the year.
Under the NDO HMRC initially require a notification of the intention to disclose. Taxpayers who make the notification by paper have had the opportunity to do so since 1 September 2009. Online notifications can now be made online. The deadline for making such notifications for both online and paper submissions ends on 30 November 2009.
Following receipt of a notification HMRC will issue a Disclosure Reference Number (DRN). The disclosures themselves can then be made by paper submission until 31 January 2010 and online until 12 March 2010.
A 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 where taxpayers were contacted by HMRC as part of the Offshore Disclosure Facility (ODF) in 2007 but did not make a disclosure.
This is expected to be the final disclosure opportunity for taxpayers to disclose arrangements without incurring significantly higher penalties. Taxpayers who have not made a disclosure by 12 March 2010 and are 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.
If you know anyone who has undisclosed taxable income or gains (for example in accounts in offshore banks) do make sure that they are aware of the NDO and take advice without delay.