Offshore tax deadline for on-line disclosures closes this week

News - Tax

Written by Ray Clancy

Monday, 08 March 2010 09:40

People with offshore investments who have notified HM Revenue & Customs that they want to use the New Disclosure Opportunity (NDO) have only a few days left to make their disclosures online and to pay what is owed.

It is the final chance for those wishing to use NDO to put their affairs in order at a favourable penalty rate of 10% as they must disclose online and pay all tax, duties, interest and penalties owed in full by Friday (12 March 2010).

HMRC has written to those who have notified them of their intent in recent days to remind them to make a full disclosure and payment, a spokesman said.

Once the scheme’s doors are closed, those found to have undisclosed offshore assets will be subject to full tax investigation, penalties of up to 100% and in the most serious cases criminal prosecution, the spokesman added.

HMRC has issued statutory notices to over 300 banks in the UK requiring them to provide relevant information about customers with offshore accounts. This information is starting to come in and it will be used to ensure that everyone pays the right tax.

‘Taxpayers with offshore investments who have notified us of their intention to disclose have done the right thing, saving themselves 90% of the potential penalties for failing to disclose. They now need to follow through by making their disclosure online and paying in full all the taxes they owe,’ said Dave Hartnett, HMRC's Permanent Secretary for Tax.

To use the NDO a notification of the intention to disclose must have been already made to HMRC as the deadline for that was 4 January 2010. Disclosures can be made electronically up to 12 March 2010.

The penalty rate of 10% will not apply to those written to by HMRC under the Offshore Disclosure Facility (ODF) in 2007. These customers will pay 20%. The ODF ran from April to November 2007, and raised over £400 million in revenue.

Once this disclosure window closes on 12 March 2010, those taxpayers who have not come forward but are found to have unpaid tax liabilities will face penalties of at least 30% rising to 100% of the tax evaded and risk criminal prosecution, the organisation said.

The Chancellor has announced that the Government will legislate to make clear that all unpaid offshore tax will be viewed as deliberate non-compliance, attracting penalties up to 100% of tax due.