HM Revenue and Customs (HMRC) have issued a statement to the Compliance Reform Forum members confirming that it is continuing to pursue taxpayers you may have omitted to make a full disclosure under the previous Offshore Disclosure Facility (ODF) and that they will be consulting on a further ODF. The HMRC statement says:
Briefing for the Compliance Reform Forum, following the Financial Secretary to the Treasury’s comments at the Fight Against International Tax Evasion Conference in Paris on the 21st October.
Following rulings against a number of major financial institutions, HMRC obtained details of approximately 400,000 offshore bank accounts belonging to people with UK addresses. We believe the 400,000 accounts relate to 260,000 individuals and estimate that up to 25% of these individuals had not included income and/or interest from these accounts on their returns.
In April 2007, HMRC launched the ODF, enabling investors with offshore accounts to disclose tax due on income and gains not previously included in their returns. 62,000 investors came forward in the initial registration stage, which closed on 22 June 2007. Around 45,000 of these came forward to disclose and pay by the 26 November 2007 deadline. Those who notified, made a full disclosure by 26 November 2007, and paid the amounts due were able to take advantage of the fixed 10% penalty.
HMRC is pursuing those with offshore accounts who did not come forward under the arrangements where there is a risk that the full amount has not been declared. In the most serious cases, criminal investigation may follow. The scheme has so far recovered around £400m in unpaid revenue. The cost to the Exchequer of running the scheme has been approximately £6.5m.
Current position on a new disclosure opportunity
During the evasion conference in Paris, the Financial Secretary informed members of the press that HMRC would be giving offshore account holders a new disclosure opportunity in 2009.
We are currently unable to provide any further details. However we feel it is important to be transparent on this important initiative, and ensure the Compliance Reform Forum is kept fully aware on current progress.
While we are unable to discuss specifics, the objective will be to obtain information from a new tranche of financial institutions, using the same legal powers as applied to the first 5 banks.
The intention of the new exercise will be to provide an opportunity for account holders to inform us of their own accord, if they have unpaid tax or duties and to settle their debts in a similar way to the original offshore disclosure facility.
In anticipation of the new opportunity, HMRC will be extending an invitation to professional bodies to contribute through the Compliance Reform Forum to the design of this new disclosure opportunity.’
The Chartered Institute of Taxation is represented on the Compliance Reform Forum, and aims to be involved in this consultation. If you have any comments on this subject, then please send them to firstname.lastname@example.org with‘ODF - FAO Tina Riches’ in the subject line.
020 7235 9381