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HMRC’s New Disclosure Opportunity (NDO) will begin on 1 September and involve accounts in hundreds of banks, the department has confirmed.
The latest move to combat tax evasion will offer holders of offshore bank accounts the chance to reveal the details of undeclared income, with fines limited to 10% or 20% depending on whether an individual was contacted or not during the 2007 Offshore Disclosure Facility (ODF).
Notifications from individuals of their intention to make use of the NDO will be accepted in paper form from 1 September, and via the web from 1 October. The notification window will close on 31 October.
Those choosing to submit their details on paper will have until 31 January to do so, while people preferring to proceed online will have a 12 March deadline.
HMRC have not revealed the exact number of banks that will be involved during the NDO period, although the department did say that ‘several hundred’ will be approached over the coming weeks.
No details about the terms of the NDO have so far been announced, leading tax investigations specialist John Cassidy to recommend that the maximum period for which arrears are investigated be kept ‘short and sweet’, for the benefit of account holders and the Revenue.
During the ODF, targeted individuals were expected to report undeclared liabilities over the prior 20 years – which ‘had a hugely negative impact on the overall amount of tax arrears that HMRC collected’, said Mr Cassidy, citing anecdotal evidence.
‘I understand that many potential users of the ODF were put off by the sheer enormity of the project. The scale of the amounts they would have had to pay, irrespective of whether they were justified, acted as a major disincentive – as did the huge, perhaps impossible, task of obtaining or recreating accurate records for such a long period,’ added Mr Cassidy, a partner at PKF.
‘The maximum period for the NDO should be kept short – set at ten years or less – to sweeten the offer for offshore account holders and provide a real incentive for them to come clean.
‘If more individuals take part, HMRC will collect more tax arrears overall and it won’t be left with a long list of offshore account holders to investigate in detail. As this is likely to be the last tax “amnesty”, keeping it short and sweet should give the best result for all parties.’
