Make the most of the offshore tax amnesty
Oct 23 2009 Business Insights with Ronnie Pannu, The Journal
HM Revenue and Customs (HMRC) drive to tackle tax evasion and avoidance by UK taxpayers with bank accounts and assets held offshore continued with the launch, on 1 September, of a new 'tax amnesty', known as the New Disclosure Opportunity (NDO).
The launch coincides with HMRC's efforts in forcing UK-based banks and financial institutions to hand over details of those UK customers who have held or continue to hold offshore bank accounts and assets. In August this focus took a surprising turn when HMRC was able to secure court approval to force 308 banks and institutions to hand over the details of the offshore accounts held by their UK-based customers.
The timing of this development is no coincidence; the message from HMRC seems to be clear - if you don't come forward and disclose any unpaid tax liabilities we now have the information to identify you.
The NDO is open to taxpayers who hold, or have held, offshore assets (including bank accounts) that have produced taxable income/profits but have not been disclosed to HMRC, either deliberately or accidentally.
Individuals have until 30 November 2009 to consider whether they have a tax issue and notify their intention to make a disclosure under the NDO. They then have until the end of January 2010 or 12 March 2010 (depending on whether forms are submitted on paper or electronically) to make the disclosure and pay their liabilities.
In a parallel move, HMRC have also launched the Liechtenstein Disclosure Facility (LDF) aimed at UK taxpayers who have undisclosed bank accounts or assets specifically in Liechtenstein. The launch of the LDF follows detailed discussions between HMRC and the Liechtenstein authorities. When compared with the NDO, the LDF has potentially more favourable terms. For example, the disclosure period is restricted to 10 years in the LDF (compared with 20 years under the NDO) and in addition HMRC has committed to providing assurances around criminal prosecution in appropriate cases.
The terms of the LDF are more complex than the NDO and appear to reflect HMRC’s expectation that taxpayers needing to disclose under this facility are likely to have more complex affairs.
At PricewaterhouseCoopers (PwC) we have a free 24-hour helpline (0800 3288215) manned by tax specialists who are able to provide confidential advice and support to those thinking of making a disclosure to HMRC under either the NDO or the LDF.
For more information contact Ronnie Pannu, tax investigations director at PricewaterhouseCoopers, Newcastle on 0191 232 8493, email: ronnie.pannu@uk.pwc.com or log onto www.pwc.co.uk/newcastle
