Tax & Accounting News

Offshore Tax Issues

17/11/2008

HM Revenue & Customs (HMRC)  is preparing for the latest phase of its crackdown on taxpayers holding offshore accounts.

The targeting of offshore accounts began in April 2007 when the holders were given two months to notify HMRC that they intended to disclose any unpaid tax, plus any other undeclared liabilities, going back 20 years. The deadline to make the disclosure, and pay any tax due, expired in November 2007.

HMRC has recovered around £400 million so far from the exercise but has continued to pursue people with offshore accounts and credit cards linked to offshore accounts that did not come forward during the amnesty.

Banks have provided information to local tax offices, including details of interest earned and account balances at certain dates, which tax officers will now be investigating to establish the source of the funds held in the accounts.

During the amnesty, HMRC agreed to limit penalties to those who admitted owing additional tax to ten per cent of the outstanding tax.  However, we think that HMRC  will now be seeking much higher penalties.

Harris Lipman’s head of tax Martina Fitzgerald said: “Anyone affected by this new phase of HMRC’s enquiries would be wise to seek expert tax advice on how best to proceed. Please contact us if you would like further information.”