Everyone will remember the amnesty a couple of years ago during which people were encouraged to disclose previously unreported income and submit to a mitigated penalty. HMRC did not like it being called an amnesty. They preferred the term “offshore disclosure facility”. Those who failed to disclose under this amnesty were going to be subject to investigations that could be “intrusive and thorough”. Well, nearly. In the Budget, Mr Darling announced that those who did not come clean before will be given another opportunity to do so – I wonder what happened to the “intrusive and thorough” investigations. All they now say is that they “will pursue those who do not disclose”.
Details of the new amnesty have now been announced – this one is called the New Disclosure Opportunity. You have to smile. Picture the scene. Man in balaclava goes into bank and says to cashier: “See this gun? I would like to offer you an opportunity . . .”
Anyway, this new amnesty is intended to encourage taxpayers to disclose income otherwise not declared to the UK tax authorities, providing one of the sources is an offshore account. It will run from autumn 2009 until March 2010. A penalty of 10 percent will be imposed for full disclosure providing there was no previous opportunity to make this disclosure. If there was, there will be a higher penalty.
By way of further encouragement, HMRC mention that they are seeking to obtain details of offshore accounts and assets from hundreds of financial institutions – and, as will have been noted from previous Bulletins, they have been extremely successful in obtaining court orders for such disclosure. Accordingly, HMRC suggest that all account holders will know that HMRC has, or will soon have, their details – so they had better get on with their disclosure or there will be trouble (see where the gun comes in?). HMRC prefer to say that taxpayers who do not disclose “will be disappointed” because they will face the likelihood of HMRC contacting them after the disclosure window has closed and imposing a higher penalty.