Offshore is bad, very bad

Hartley Foster, Tax Partner, Olswang

Several opportunities have been provided to taxpayers ‘to come clean’ about the holding of undeclared offshore assets or bank accounts. These include the 2007 Offshore Disclosure Facility, the New Disclosure Opportunity and the Liechtenstein Disclosure Facility. The final opportunity for disclosure ends on 4 January 2010 (unless another final Facility is introduced (again) or the deadline for disclosure is set back (again)).

Having shown taxpayers some carrots, HMRC now would like some fasces.

A consultation document was released today that contains proposals for robust deterrents against taxpayers who fail to disclose their offshore assets or income behaviours.  A requirement for taxpayers to notify all new offshore accounts in high risk jurisdictions is suggested also.  HMRC’s proposals include tax geared penalties for non-compliance and up to 100% penalties for undeclared tax.

Any taxpayer who has not used the New Disclosure Opportunity but has offshore assets or bank accounts to declare can expect a penalty notice in due course.