HMRC planning a new offshore tax campaign

21 November 2008

HM Revenue and Customs (HMRC) is to embark on a second campaign next year in pursuit of unpaid taxes on funds held in offshore accounts.

HMRC’s offshore disclosure facility will be aimed at customers in around 300 banks and building societies.

A similar campaign, carried out last year, targeted account holders in the major banks and netted some £450 million in unpaid liabilities from about 45,000 people.

A spokesperson for HMRC said: “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.”

During the last campaign, account holders with undisclosed liabilities were offered the incentive of a cap of 10 per cent on the penalty for not disclosing their tax debts to HMRC.

This time it is expected that the penalty will be set at 20 per cent or 30 per cent of the tax due, even though HMRC have the power to charge 100 per cent.

Those who fail to declare their funds could face much higher fines and, in some cases, prosecution.

HMRC has insisted that the new campaign, like the previous one, will not be a tax amnesty, with fund holders expected to pay the full amount of any tax liability and the interest owed on it.