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Many details remain unconfirmed regarding HMRC's latest attempt to recoup money lost to the department through tax evasion - leading to concerns among tax experts.
The long-awaited 'Offshore Disclosure Facility II' was announced as a brief notice in yesterday's Budget documentation. It will be known as the New Disclosure Opportunity (NDO) and will run between ‘autumn 2009’ until March 2010.
Holders of offshore accounts will be encouraged to come forward with full details of unpaid taxes and duties, and they will be expected to settle all debts with the Revenue.
The department has insisted that the new measure is not an ‘amnesty’ – as 2007’s Offshore Disclosure Facility (ODF) was considered by tax professionals because of its fixed 10% penalty charge.
Those who make use of the NDO will be expected to pay full tax, interest and a fixed penalty, said HMRC, and in some cases they will be prosecuted. They will, however, enjoy more favourable terms than the people who choose not to share their details with the taxman.
Those who remain silent will be ‘pursued relentlessly’, warned the Revenue.
The department has also sworn to ‘risk-assess information from notices served on banks to identify those suspected of under-declaring’.
The new offshore disclosure scheme was first rumoured about 18 months ago, around the same time as HMRC hailed the ODF as a success, even though it raised only £400 million of the £1.75 billion target.
Speculation about the specifics of ‘ODF II’ gathered pace following the Pre-Budget Report last November – and it was widely accepted within the tax sector that the facility was ready to launch.
No specific start date for the NDO has been announced, however, and nor have details of the terms for those who come forward.
Also yet to be established are the contact details for offshore account holders wishing to approach the Revenue, which has not yet set up an NDO section on its website.
Details are expected to be revealed within the next few weeks.
PKF tax investigations partner John Cassidy said that the unveiling of the NDO was ‘long overdue’, and the ‘serious lack of detail’ was ‘disappointing’.
The measure will, however, allow holders of offshore accounts to ‘properly square matters with HMRC and get their affairs back in order’, added John.
Taxation editor Mike Truman remarked that the wait for the new offshore disclosure scheme had been so long that it was ‘in danger of becoming a joke’.
‘The tax industry’s understanding was that it would begin this month. The delay until an unspecified time in autumn suggests that all is not well behind the scenes,’ said Mike.
