Authorities increase the pressure on Offshore account holders, now that the disclosure amnesty has ended
Do you have an overseas bank account? If so you may remember that early in 2007 HM Revenue & Customs (HMRC) successfully managed to obtain details of approximately 400,000 offshore bank accounts in the Channel Islands, the Isle of Man, the Republic of Ireland, Gibraltar and Cyprus. HMRC estimated that 100,000 of these account holders had unpaid tax.
Five of the High Street banks were targeted for information, and as a result 62,000 account holders came forward under the Offshore Disclosure Facility (ODF), which was set up to provide an amnesty for account holders to provide HMRC with the required disclosures and make tax payments, whilst avoiding any penalties. The deadline for submission of your disclosure ended on 27th November 2007.
Many of the remaining 38,000 account holders, who’s information remains undisclosed, may be customers of other financial institutions and possibly remain unaware that this amnesty to disclose accounts has now ended. For people who therefore have an Offshore account in any of the above listed countries, that have not registered their details with the Revenue, it is not a case of if, but when they will come under scrutiny.
HMRC will be investigating individuals with offshore bank accounts who appear to have tax to pay but have not notified them that they want to make a disclosure. The penalties will be much higher than under the disclosure arrangements. They are now reviewing approximately 3,500 cases per month and a number of investigations are now likely to be seen.
Disclosures that have made been under the ODF by account holders who are not customers of the five high street banks will be used by HMRC to target other financial institutions for information about offshore account holders. This information may be used as early as April 2008 to enforce that the other financial institutions provide them with information too.
As a result, the net is closing in. So if you think you have an undisclosed offshore accounts speak to a qualified accountant who will be able to discuss your concerns in confidence and consider opening negotiations with the tax authorities as the likelihood is that you will be found out.