HM Revenue & Customs’ (HMRC) announcement this morning of a new procedure for taxpayers with undisclosed sources of income, particularly offshore bank accounts, is clearly a major development in UK tax administration. The Chartered Institute of Taxation (CIOT) has always supported any initiative which makes it easier for people to meet their tax obligations, and we therefore support the broad principle of the initiative which HMRC have outlined today.
John Cullinane, CIOT President, says: “This is clearly a complex area and we believe that there are a number of aspects to this initiative which will need very careful consideration. It is right that taxpayers who have failed properly to disclose their tax liabilities should be required to pay the tax that is properly due. Equally, it is very important that proper safeguards are in place to ensure that people do not end up paying tax which is not legally due, perhaps because of their domicile and residence status.”
HMRC have indicated their willingness to enter into a dialogue with the professional bodies in order to ensure that areas of concern are dealt with properly, and the CIOT looks forward to taking part in those discussions.
John Cullinane adds: “HMRC are sending out a clear signal to those who have deliberately evaded tax on offshore accounts that this initiative offers a chance for them to come clean and bring matters up to date: if people do not take this opportunity, then they can expect to be faced with very significant penalties when HMRC commence their programme of investigating those holders of offshore accounts who have not come forward. We do have concerns that the scope of the initiative is extremely wide and that, at the moment, there is very little guidance for those with purely onshore irregularities. We hope that we can work with HMRC to resolve this, and the other areas of uncertainty. Our Members in practice will face some difficult issues in getting to grips with the structure of this new initiative within the short timescale which HMRC have allowed, and we will be publishing our guidance for members within the next few days. "
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Notes to Editors
Read the Low Incomes Tax Reform Group's comments on the issue