A Second Chance to Declare Interest
HMRC has given a New Disclosure Opportunity (NDO) to those who have not declared all of their income derived from offshore accounts.
There has often been a misconception that interest earned from an offshore account does not need to be disclosed and does not form part of a person’s taxable income, but this is not true for anyone who is resident and not domiciled in the UK. Any income derived from an offshore account should have been disclosed.
The first Offshore Disclosure Facility (ODF) which ended in November 2007 was introduced following a ruling by the commissioners which meant that the UK banks were asked to make available to HMRC offshore account information. The original ODF gave a total amnesty which allowed people with any unpaid taxes linked to offshore accounts or assets the opportunity to settle their tax liabilities whilst avoiding penalties.
Unlike the original ODF the latest NDO is not a total amnesty, but it does allows a more favourable penalty rate providing disclosure is made prior to 12 March 2010.
A person must notify of their intention to disclose by 30 November 2009 and make their disclosure by 12 March 2010.
FOr those wishing to make the disclosure in paper format , it must reach HMRC together with all payments by 31 January 2010. Those doing so electronically have until 12 March 2010.
A penalty rate of 10% will be applied to anyone now making a disclosure that had not been written to by HMRC under the original ODF. There is no penalty if the total taxes underpaid are less than £1,000.
Anyone who HMRC wrote to about the availability of the ODF in 2007 but they still did not make the required disclosure will be subject to a fixed 20% penalty rate if they now disclose under the New Disclosure Opportunity.
Those who ignore this final opportunity will face at least a 30% penalty and possible criminal prosecution should their non-disclosure be discovered in the future.
If anyone considers they may have a disclosure to make it is worth seeking advice to help keep potential penalties to a minimum, as this is your final chance, we think!!
Biggleswade Chronicle - 16th October 2009