Second tax amnesty could hit offshore savers even harder
Tougher penalties to come for offshore savers as HMRC plans its second 'tax amnesty'
Tax haven: Jersey
Plans for a second offshore ‘tax amnesty’ by
HM Revenue &
Customs could see tougher penalties for people hiding their savings
offshore, a tax expert has said, amid frustration over delays to starting the
scheme.
Speculation has mounted since HMRC confirmed in October last year it would be
conducting a second tax amnesty, which it calls an ‘offshore disclosure
facility’.
The amnesty offers taxpayers a reduced penalty for voluntary disclosure of
bank accounts held in offshore jurisdictions.
The penalty for HMRC’s first amnesty in 2007 was capped at 10% of the
outstanding tax owed plus interest. The amnesty netted the taxman an estimated
£400m.
Andrew Watt, managing director of tax disputes and investigations at
Alvarez
and Marsal Taxand, said taxpayers who disclose information relating to
offshore bank accounts are likely to incur tougher fines in a second amnesty.
He said: ‘The penalty applied for the next amnesty might be higher as HMRC
will argue they had an opportunity two years ago.’
In its first tax amnesty HMRC relied on the five major UK high street banks
and accountants to inform customers and clients about the scheme.
But one tax expert familiar with the situation said the second tax amnesty
was likely to be much bigger, extending to include customers of about 30 foreign
banks.
Bill Dodwell, tax partner at
Deloitte,
said: ‘We’re puzzled as to why [the announcement of a second amnesty] has taken
so long.’
Dodwell said the first amnesty was criticised for not being widely
publicised.
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‘If you didn’t understand a letter you got from the bank then you may not
have made a disclosure and if you weren’t a client of an accounting firm then
you may not have understood at all,’ he said.
A spokesman for HMRC said the department is yet to finalise details of a
second amnesty. He confirmed, however, that discussions are continuing with the
British Bankers’ Association, the Building Societies Association and the
Association of Foreign Banks in determining ‘how we can work together on
offshore accounts.’
