Offshore Amnesty of Tax Payers

HM Revenue and Customs (HMRC) have just announced a tax amnesty for holders of offshore bank accounts, a move which could affect over a million people.

It is advised that individuals who currently owe tax on money held in their offshore accounts should act now and make sure they benefit from both significant savings and peace of mind before the 22 June deadline. We caution expatriates and offshore investors that failure to act could mean investigation and even prosecution.

Dubbed a tax ‘amnesty’, the HMRC’s Offshore Disclosure Facility is designed to target UK taxpayers with undisclosed offshore bank accounts, making sure that they are both disclosed and that all outstanding taxes are paid. Grant Thornton UK LLP are predicting this will net the Treasury as much as £5 billion.

People who do so will be spared a full investigation, and the penalty charges – which are usually anything up to 100 per cent – will be capped at only ten per cent of the outstanding amount.

In addition, people with undisclosed tax liabilities from UK bank accounts can apply to be treated on the same terms as those with funds held offshore.

The amnesty announcement comes after HMRC experienced court success last year with regard to getting information from banks about holders of overseas accounts. This means that the HMRC will be in full possession of names, so those dodging their UK taxes yet failing to declare them at this point are likely to face a vigorous investigation.

Paul Roberts, tax investigations partner at Grant Thornton, believes the term amnesty is somewhat misleading but says, "It worked marvellously well for the Irish Treasury, netting some £580 million. It has already been estimated that about £1.5billion in unpaid tax could be sitting in the Barclays Bank offshore accounts alone, the details of which have already been passed to the taxman as part of a request for information."

He continues: "HMRC will vigorously pursue those who do not take advantage of this tax 'amnesty' and even some of those who do; if they believe there is cause for further investigation. Recriminations for people in this position will be severe – HMRC is certainly making it clear that they will not be messing about with suspected tax evaders.

"It does appear that if taxpayers make a genuine effort to disclose reasonably accurately then HMRC will accept their disclosures. However, these can be complex, particularly for those disclosing for several offshore assets as individuals will be required to submit several disclosures. It's likely to be confusing for many taxpayers and specialist advice should be sought."

What do I need to do?

If you are unsure whether you need to disclose your offshore bank account, we would be happy to advise. All we would need to know is where you are resident in the world, how long you spend in the UK each year (on average), your nationality and where the bank account is based.

Candour Consultancy has no reporting obligations to HMRC and your query will be treated with the strictest confidence. Just click the ‘contact us’ button below to email us the information or call us on +971 4 312 44 10.