HM Revenue and Customs Announces Offshore Bank Account Amnesty

HM Revenue and Customs has announced it's upcoming offshore bank account amnesty for the fist of September this year.

Tax-news.com reported that the New Disclosure Opportunity (NDO), not to be confused with the NWO, was announced during the 2009 budget meeting. It is one of the new measures designed to increase tax revenue from the current system. The NDO levies as 10% fine for full disclosure of previously undeclared income connected to an offshore account will be 10%. This, of course, is much lower than it would be otherwise.

The HMRC will launch a national advertising campaign in order to promote awareness of the NDO and avoid concerns of a repeat of the previous offshore bank accountdisclosure scheme two years ago, which was poorly understood.

Although the last Offshore Disclosure Facility (ODF), ran in 2007, gave the government an additional 400M pounds sterling of tax, this year's NDO has targeted 2 Billion pounds.

John Cassidy, a Tax Investigations Partner at PKF Accountants says the 20-year time limit applied to the 2007 campaign deterred many offshore account holders from disclosing income.

Normally, the period for which individuals are asked to settle tax arrears is six years. However, Cassidy points out that the corollary to this is that, in most cases the rate of penalty charged on the tax paid late is likely to be higher than the 10% rate on offer through the NDO.

“The maximum period for the NDO should be kept short – set at ten years or less – to sweeten the offer for offshore account holders and provide a real incentive for them to come clean,” Cassidy argued.

We will continue to watch these developments within the UK and HMRC.