United Kingdom: HMRC Announces Extension of Amnesty for Some Offshore Accounts
The United Kingdom’s HM Revenue and Customs (HMRC) has announced an extension to the deadline for taxpayers registering an intention to make a disclosure under the New Disclosure Opportunity (NDO) from 30 November 2009 until 4 January 2010.1 There is, however, no extension to the time to complete the disclosure, which remains 31 March 2010.
HMRC, on 29 July 2009, announced a second “Offshore Disclosure Facility” (ODF) – known as the New Disclosure Opportunity (NDO) – for those who have unpaid taxes linked to offshore accounts or assets2 (for prior coverage, see Flash International Executive Alert 2009-151, 13 August 2009). (The first ODF ran from April to November 2007.)
HMRC reports it is receiving information from 308 U.K. financial institutions about people in the U.K. with offshore bank accounts. Individuals with undisclosed offshore accounts are being encouraged to report their information to HMRC.
Under the NDO, taxpayers with undisclosed tax liabilities may be subject to a maximum penalty of 10 percent of the outstanding tax (in addition to paying the total tax and interest due) compared with penalties of at least 30 percent rising to 100 percent of the tax evaded if the HMRC discovers individuals who have not come forward voluntarily. Such individuals also run a risk of criminal prosecution.
Details of the NDO are available at:
New Deadlines: Limited Time to Make Disclosure
The revised key deadlines are as follows:
4 January 2010 – Those wishing to take advantage of the NDO must register an intention to make a disclosure by 4 January 2010.
31 January 2010 – The actual disclosure must be made by 31 January if the disclosure is made on paper. The tax due plus interest and penalties must also be paid by this date, unless a special arrangement is made with HMRC. There has been no extension to this deadline.
31 March 2010 – This later deadline applies to disclosures made electronically. This later deadline also applies to any tax due plus interest and penalties, unless a special arrangement is made with HMRC. There has also been no extension to this deadline.
Dave Hartnett, HMRC’s Permanent Secretary for Tax recently said, “We know that some bank customers will not be contacted by their banks in good time for the original deadline of 30 November, so in the interests of fairness we have decided to extend our deadline by a month to 4 January. I strongly urge anyone who has been hiding taxable assets offshore to go online and register. The NDO is voluntary, but from the start of the New Year we will begin to investigate those who were eligible to use the NDO but instead buried their heads in the sand. Don’t let that happen to you.”3
Although taxpayers can legally hold such accounts or assets, it is vital that any tax liabilities are properly discharged and any reporting obligations are fully and timely complied with.
If individuals are unsure whether or not they have unpaid liabilities in respect of offshore accounts and assets, particularly if their financial affairs involve complex structures, they should seek professional advice about whether they have relevant liabilities and if making a disclosure through the NDO is appropriate.