Have You Got Offshore Accounts To Declare?
In 2007 HM Revenue & Customs (HMRC) announced an Offshore Disclosure Facility (ODF) which enabled individuals in the UK that had offshore accounts, in the then big five banks, to come forward and declare them plus pay the corresponding Income Tax liabilities, interest and a reduced penalty. Some 65,000 disclosures were made out of a possible 140,000, which brought in £400m to HMRC in tax, interest and penalties.
On 1 September 2009 HMRC launched a New Disclosure Opportunity (NDO) which enables individuals who hold accounts in any financial institution (not just the big five banks) to declare it and pay the tax, interest and a reduced penalty of 10%. In cases where the unpaid tax is less than £1,000 HMRC do not intend to charge a penalty. HMRC are seeking to secure around £500m this time round!
Please also note that if you were contacted during the initial ODF and offered voluntary disclosure but did not make disclosure then the minimum penalty is 20% and not 10%.
HMRC have already issued 308 information notices to financial institutions to request details of their UK offshore bank account holders and just like the ODF, they are obliged to supply this information.
If you come forward and disclose your offshore account before 30 November 2009 then HMRC will charge you tax, interest and a reduced penalty of 10%. If you decide not to declare your account and HMRC, at a later date discover your account and assess you to tax then you would be likely to receive a penalty of between 30% and 100% of the unpaid tax.
We have the necessary forms required to notify HMRC so if you would like to make a disclosure please contact our tax team.