Following a meeting with the professional bodies HMRC have provided some information regarding the forthcoming New Disclosure Opportunity (NDO), to enable taxpayers to disclose income otherwise not declared to the UK tax authority, providing one of the sources is an offshore account.
The Chartered Institute of Taxation (CIOT) is one of the bodies working with HMRC with the intention of making the NDO work as effectively and efficiently as possible. We are pleased to note some of the attributes of the proposed scheme such as planned publicity by HMRC and other points listed below. However, we do have a number of concerns regarding the outline proposals, but we understand that these are currently being considered by HMRC as the plans are refined.
The key messages provided by HMRC are as follows:
- The New Disclosure Opportunity (NDO) is for people with unpaid tax connected to an offshore account and will run from the autumn 2009 until March 2010. It will give the offshore account holders one final opportunity to disclose, and put their affairs in order.
- Penalty of 10% for full disclosure if no previous opportunity. Higher for full disclosure if you had the chance under previous opportunity.
- HMRC is seeking to obtain details of offshore accounts and assets from hundreds of financial institutions. This ensures HMRC will be able to pursue those who choose not to disclose tax owed as quickly as possible.
- During the disclosure period, all account holders will know that HMRC has, or will soon have, their details. We have already successfully applied to get details from a number of banks.
- Although offshore account structures can be complex, HMRC will make it as simple and straightforward as possible for people to disclose.
- In addition HMRC want to work with the financial institutions and customer representative bodies to further simplify the disclosure process.
If people do not disclose
- The NDO is a final opportunity to disclose in advantageous circumstances – there will not be another one.
- Anyone who has – or thinks they have – unpaid tax connected to an offshore account, should not wait for a further opportunity – it still makes sense to come forward now.
- They will be disappointed and face the likelihood of HMRC contacting them after the disclosure window has closed. If there are unpaid liabilities, this will almost certainly mean a higher penalty at the very least.
- We have plans to risk assess all information we receive and we will identify people who we believe have undeclared liabilities but who have not disclosed through NDO.
- We will use our enquiry and inspection powers to approach customers in this group and we will vigorously pursue all outstanding liabilities.
Technical Team
