HMRC Offshore Account Disclosure
Further to H M Revenue & Customs (HMRC) successful attempts to obtain details of offshore account holders from Barclays Bank, four other high street banks have now fallen in line providing details of an estimated 4,300 offshore account holders.
In view of the volume of the suspected tax evasion, HMRC are offering what has been described as an amnesty for tax payers with undisclosed offshore accounts, whereby in return for a full disclosure of all (onshore and offshore) undisclosed sources made before 22nd June 2007 they will agree to cap penalties at 10%.
Currently only 1% of potentially suspicious accounts have been disclosed, although Dave Hartnett, director general of HMRC is on record as saying he suspects a last minute rush before the deadline expires. This is however based on studies of what has happened in different countries offering such amnesties and it is worth noting here, that in some cases, the Republic of Ireland being notable, that the terms of the amnesty were far more favourable than simply a reduced penalty.
What would appear to be clear is that for any one not taking advantage of the amnesty, but later found to be in possession of undisclosed income, they can expect little mercy from HMRC who will no doubt relish the opportunity to use their powers to re open the last 20 years Tax Returns, charge the maximum permissible penalties, and in the most serious cases prosecute and or bankrupt tax evaders to make an example of them.
It is also possible that many people with perfectly legitimate reasons for having offshore accounts will get caught up in HMRC's enquiries; for example those who are non resident or non domiciled and individuals who have bought property abroad whereby they may have had significant sums on short term deposit to fund purchases or building work. If unrepresented, this group in particular runs the risk of receiving demands for tax and penalties which may not be justified.
With the last Irish amnesty netting their Government £569m from a population of approximately 4 million, this is obviously a policy that Mr Hartnett will be pursuing with vigour for some time to come.
At Davis Burton Sellek all of our tax advisors have Revenue & Customs backgrounds and have significant experience in dealing with investigation and enquiry work. We would advise anyone effected by this issue to take professional advice before making any disclosure so that the best possible settlement can be negotiated.
In view of the volume of the suspected tax evasion, HMRC are offering what has been described as an amnesty for tax payers with undisclosed offshore accounts, whereby in return for a full disclosure of all (onshore and offshore) undisclosed sources made before 22nd June 2007 they will agree to cap penalties at 10%.
Currently only 1% of potentially suspicious accounts have been disclosed, although Dave Hartnett, director general of HMRC is on record as saying he suspects a last minute rush before the deadline expires. This is however based on studies of what has happened in different countries offering such amnesties and it is worth noting here, that in some cases, the Republic of Ireland being notable, that the terms of the amnesty were far more favourable than simply a reduced penalty.
What would appear to be clear is that for any one not taking advantage of the amnesty, but later found to be in possession of undisclosed income, they can expect little mercy from HMRC who will no doubt relish the opportunity to use their powers to re open the last 20 years Tax Returns, charge the maximum permissible penalties, and in the most serious cases prosecute and or bankrupt tax evaders to make an example of them.
It is also possible that many people with perfectly legitimate reasons for having offshore accounts will get caught up in HMRC's enquiries; for example those who are non resident or non domiciled and individuals who have bought property abroad whereby they may have had significant sums on short term deposit to fund purchases or building work. If unrepresented, this group in particular runs the risk of receiving demands for tax and penalties which may not be justified.
With the last Irish amnesty netting their Government £569m from a population of approximately 4 million, this is obviously a policy that Mr Hartnett will be pursuing with vigour for some time to come.
At Davis Burton Sellek all of our tax advisors have Revenue & Customs backgrounds and have significant experience in dealing with investigation and enquiry work. We would advise anyone effected by this issue to take professional advice before making any disclosure so that the best possible settlement can be negotiated.
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