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Taxpayers who admit to undisclosed income from offshore bank accounts will pay a penalty of no more than 10% – but only if they have never before been approached by HMRC.
When the New Disclosure Opportunity (NDO) is launched in the autumn (the exact date is to be confirmed), individuals will be expected to respond to Revenue enquiries concerning unpaid taxes.
Those people who were not previously subject to scrutiny during the Offshore Disclosure Facility – the so-called tax ‘amnesty’ – of 2007 will be charged an additional 10% or less if the take advantage of the NDO.
The fine will be ‘higher for full disclosure if you had the chance under previous opportunity,’ said the taxman, adding that those who choose not to come forward will suffer ‘a higher penalty at the very least’.
The Revenue has previously warned that individuals who chose not to make use of the NDO will be ‘pursued relentlessly’.
The Chartered Institute of Taxation (CIOT) welcomed the news of the limited penalty for some holders of offshore accounts, saying that it ‘will encourage taxpayers with undisclosed income… to disclose their income’.
The chairman of the CIOT’s management of taxes sub-committee, Gary Ashford, added that ‘it makes every sense to help such people regularise their tax affairs, particularly as many will have fallen foul of the law through mistake or misunderstanding’.
George Bull, head of tax at Baker Tilly, echoed Mr Ashford’s remarks, saying, ‘The 10% penalty is to be welcomed as a practical rethink after a 30% penalty was originally mooted. A "stick and carrot" initiative is pointless if it’s all stick with no carrot.’
