Second Offshore Disclosure facility

On 20 November 2008 HM Revenue & Customs confirmed that it is to launch a second campaign in 2009 to collect unpaid tax in offshore accounts. The Offshore Disclosure Facility (ODF) will target account holders with money in building societies and any of the 300 UK-based banks that have offshore operations. Last year’s similar campaign focused solely on customers of the five largest high-street banks. According to an HMRC spokesman,

“The intention of the new facility will be to provide an opportunity for account holders to inform us of their own accord of any unpaid tax or duties and to settle their debts in a similar way to the original offshore disclosure facility.”

Taxpayers affected will face threat of prosecution and higher fines if they do not come forward. It is likely that fines may be capped at 20 to 30% of the tax due to encourage people to come forward. They were capped at 10% under the previous ODF. However, HMRC stressed the campaign will not be a tax “amnesty” as all unpaid tax and interest will have to be paid in full.

The Revenue will write to the 300 banks and building societies requesting names and addresses of all their UK resident customers with offshore accounts. It will then write to customers requesting any unpaid tax. The first ODF identified some 400,000 accounts as suspicious. It raised £450 million from 45,000 people but a further 50,000 are still being investigated and some may soon be prosecuted.

“HMRC has made follow-up checks of the disclosures made and has started a programme of checks on those who did not take the opportunity to come forward,” the Revenue spokesman said. “In the most serious cases, we are carrying out criminal investigations and we will bring some prosecutions before the courts.”

Comments are closed.