Offshore savers offered final tax amnesty as HMRC looks to recover £2bn+

Published at 12:10 PM on 22 May 2009

Individuals with undeclared funds in offshore accounts are urged to make a voluntary disclosure to HMRC. Savers are urged to declare any unpaid liabilities to minimise costs and other consequences of their mistakes in an HMRC amnesty, called a New Disclosure Opportunity (NDO), that will start in the autumn.

Stephen Camm, tax partner, PricewaterhouseCoopers LLP, said:

“Now is a critical time for anyone with undeclared funds in an offshore account or undeclared income from offshore assets, to take stock of their situation and ‘come clean’, if they are to minimise the costs and other consequences of their mistakes. There will be no more chances.”

HMRC is seeking access to details of UK resident customers with offshore bank accounts at more than 500 UK and foreign banks and building societies. Recently published Special Commissioners’ decisions, in which information notices were served on four, as yet, unnamed financial institutions show that HMRC remains determined to flush out all those with unpaid liabilities.

Stephen Camm, tax partner, PricewaterhouseCoopers LLP, warned:

“Using the estimate of tax lost in these new Special Commissioners’ decisions and applying it across the population of 500 or so institutions that HMRC is engaged with, it is estimated that HMRC will recover more than £2bn in unpaid tax in this second and final amnesty.”

The NDO will run until March 2010 and account holders will be offered lower than normal penalty levels to encourage them to come forward.

By gathering information from all financial institutions, HMRC will ultimately be able to identify people who don’t come forward under the amnesty. It is likely that such individuals will face larger penalties, greater prospect of prosecution and be subject to new naming and shaming provisions.

Individuals that find themselves needing to make disclosures might include family members who receive an inheritance in an offshore account with no explanation of where the funds came from, and businessmen who have diverted business profits offshore deliberately to avoid tax.

Stephen Camm offers people who may be considering the need to disclose the following tips:

  • Don’t bury your head in the sand, act promptly to avoid becoming a target for HMRC investigation.
  • Gather all relevant information such as bank statements to help calculate tax and interest due.
  • Make contact with an adviser who understands what type of evidence will be needed to ensure your disclosure is accepted without protracted enquiries from HMRC.

Notes to Editors:

1. The New Disclosure Opportunity was announced in the Budget April 2009. 2. The Special Commissioners’ decisions reference numbers are SC2006/09 (TC00009), SC2007/09 (TC00010) and SC2008/09 (TC0011). 3. The three decisions in relation to four institutions include HMRC’s calculations of the minimum additional tax likely to be due. These estimates are £5.2m, £9.5m and £3.9m, giving a total of £18.6m, an average of £4.65m across the four institutions. If this average is applied across all the 500+ institutions that HMRC is now targeting then the yield from NDO could be in excess of £2.3bn. PricewaterhouseCoopers has set up a 24 hour helpline (0800 328 8215) to help taxpayers who would like to discuss what HMRC’s initiative means for them. 


For more information contact:

Georgina Rushie
Tax PR Manager, PwC 
Tel:020 7804 6924 
Mobile:07725 707 175 
 

Stephen Camm
Partner, PricewaterhouseCoopers LLP 
Tel:020 7212 3142 

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