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The registration deadline for the new disclosure opportunity has been pushed back by HMRC, following an appeal by banks involved in the so-called second tax ‘amnesty’.
Individuals with unpaid taxes from offshore accounts and assets now have until 4 January to come forward.
More than 300 banks were contacted by the Revenue in preparation for the NDO, but some have refused to hand over details of clients while others claimed they would not be able to contact customers in time to inform them of the original 30 November deadline.
The news of the extension has been met with mixed reactions from within the tax profession.
Earlier this week, investigations specialist John Cassidy called for the date to be moved to 6 April 2010 at the earliest ‘to give HMRC a fighting chance of writing to every offshore account holder personally’. The new January cut-off point is ‘entirely sensible’, he said.
‘Not only will it benefit taxpayers who might not know about the NDO, it is also a commonsense decision by the Revenue to get as much money as possible into its coffers.’
Mr Cassidy, a partner at PKF, went on to suggest that HMRC ‘has clearly learned’ from the experiences of the USA’s Internal Revenue Service, which earlier this autumn lengthened its own tax ‘amnesty’.
He said: ‘If this trend carries on, the Revenue’s next move will be an announcement in the pre-Budget report that all UK taxpayers will have to declare details of their offshore accounts when filing future tax returns – just like the FBAR rules in the USA. This would stop individuals opening offshore accounts in future as it would be backed by swingeing penalties for those who don’t report their accounts.’
Phil Berwick, director of tax disputes and investigations at McGrigors law firm, was more critical of the change to the NDO, saying that it ‘doesn’t do the Revenue’s credibility much good’.
He added that HMRC should have announced the new registration deadline earlier, and that the department has ‘shown that the whole process has not been properly managed’.
He also disparaged the fact that the deadline for disclosures has not been changed. Individuals who register with the NDO will have until 12 March to submit their financial details.
Taxpayers will only have a short period ‘to calculate 20 years of unpaid taxes’, claimed Mr Berwick. ‘That means there’s a large possibility of mistakes being made, leading to further problems down the line.’
Grant Thornton’s head of tax investigations, Paul Roberts, claimed the HMRC’s latest announcement ‘comes as no surprise’.
He said: ‘The initial take up of this initiative has been slow and… the wider marketplace has generally seen a relatively low take-up.
‘The extension of the NDO registration deadline is… recognition by HMRC that many bank customers should not be disadvantaged and that further banks will be writing [to clients] in the coming weeks.’
Gary Ashford, chairman of the CIOT’s management of taxes sub-committee, praised HMRC’s ‘sensible and realistic move’ and remarked that ‘the new deadline should work, even if it might mean an uncomfortable Christmas for some taxpayers’.
The head of Baker Tilly's tax investigations group, Mike Down, said the NDO had been 'rather rushed in the way it was set up' and the extra time will 'give people time to reflect and discuss their situation with friends and family'.
