Possibly. HM Revenue & Customs have recently announced what is known as an 'Offshore Disclosure Facility' (OFD). This facility allows UK taxpayers to 'come clean' about any offshore investments they have held within the last twenty years but have failed to inform HMRC. Such items would include overseas properties and bank accounts.
This announcement is as a result of HMRC obtaining offshore bank account details from a major high street bank. The issue being that these bank accounts are sold on the basis of interest paid being tax free. However, if the account holder is a UK resident then any interest earned should have been reported to HMRC so that the appropriate UK taxes were paid.
Although this OFD was originally aimed at those with undeclared offshore investments it also offers all UK individuals and companies to come clean about any other 'irregularities' in their tax affairs over the last twenty years.
Anyone that makes a voluntary disclosure under the terms of the OFD can expect penalties to be limited to 10% of the underpaid tax. This has been restricted from the 100% maximum penalties normally available to HMRC. Please note that the penalties are charged in addition to any tax and interest due.
The 'amnesty' is only available for a short period and the key dates are as follows:
· 22 June 2007 - Individual and companies must notify HMRC that they intend to make a disclosure · 22 July 2007 - HMRC will provide those that have notified HMRC with an intention to disclose with a unique reference number.
· 22 November 2007 - Individual must have completed the full disclosure document calculated the tax, interest and penalties due and paid the amount owed in full.
· 30 April 2008 - HMRC will advise the individual or company that they either accept the disclosure or launch a formal enquiry.
I would strongly urge anyone who feels they may have income which needs reporting to HMRC to contact their professional advisor or the HMRC direct for further guidance without delay. Full details can also be found on the HMRC website at http://disclosures.hmrc.gov.uk/oaics/ Have you got a topic or general tax question you want us to cover in the Q & A next issue? Then email mikep@ taxdog.com
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