Offshore investors to be offered another amnesty

HMRC continues to chase undeclared funds, but how many will own up when they could still face prosecution? Julian Knight reports

Tens of thousands of people with money in offshore accounts are to be offered a fresh partial amnesty provided they own up to the tax they owe. As early as the new year, HM Revenue & Customs (HMRC) will officially request that as many as 150 banks and other financial institutions pass them details of customers' offshore accounts.

"We have had a meeting with 150 of these [banks] and will be serving information notices to bring more info into our net," said HMRC's director-general, Dave Harnett, speaking exclusively to The Independent on Sunday.

In the light of earlier legal rulings, these banks are unlikely to have any option but to comply with HMRC's request. Armed with this data, HMRC will then offer the taxpayers a "disclosure arrangement", in other words a partial amnesty. Mr Harnett says the terms will be "similar" to those offered in June to 100,000 people with accounts held in offshore branches of seven of the UK's biggest high street banks, often in tax havens such as Jersey and Guernsey. Under that deal, account holders who owned up and paid their back taxes, plus interest, had their fines capped at 10 per cent.

Just over 64,000 taxpayers took HMRC up on the partial amnesty by the 22 June deadline and disclosed that they had money offshore on which there could be tax to pay. These people now have until 26 November to pay what they owe, plus the 10 per cent fine, or the deal will, in the words of an HMRC spokesman, be "scrubbed".

Mr Harnett revealed that around 20,000 taxpayers have so far paid in full and, as a result, HMRC has collected £120m. But this is far short of the HMRC's special commissioner's estimate of £2bn of unpaid tax held in offshore accounts.

"This is a drop in the ocean compared to what HMRC are due," says Adrian Huston, a former inspector of taxes and an accountant, adding that the terms of the HMRC offer were too strict: "An earlier amnesty in the Irish republic brought in hundreds of millions from a much smaller economy. The key was that people were offered an upfront immunity from prosecution. The HMRC, on the other hand, still retains the right to prosecute, even those who meet all their deadlines."

However, Mr Harnett says the partial amnesty hadn't fallen flat and that he expected a last-minute rush: "I wouldn't want to guess how much we will get in, but if you look at how people responded to the June disclosure deadline, it was very back-end loaded.

"Whenever there have been disclosure arrangements where people have been offered immunity, there has been a good deal of recidivism, and authorities have had to have another amnesty a few years later ... The overarching goal is not to drag this out any longer than is needed."

But does HMRC have enough inspectors to bring those who have ignored its deadlines to book?

Mr Huston thinks not: "The HMRC has for a long time failed to employ enough inspectors. They won't have enough to sift through the information they have to date, never mind anything new."

But while acknowledging there is "a resource issue", Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, says the HMRC will go for soft targets first: "They will go after people who use the self-assessment system – these will be the easiest to trace and bring to book."

He adds: "In an electronic globalised age, the chances of disappearing money offshore and evading tax are increasingly slim. People may have got away with it till now but not in the future."

Some high-profile tax avoiders who failed to heed the June deadline could find themselves in court in a matter of weeks.

"We have been investigating some big cases since June," Mr Harnett says. "For instance, we have identified a company director who since the mid-1980s has been telling us he earns a modest salary when we know he has £1.2m offshore."

Less serious offenders can expect to be hit with fines of between 30 and 100 per cent of the unpaid tax.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Sport
David Moyes and Louis van Gaal
football
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
News
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Quantitative Risk Manager

    Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

    COO / Chief Operating Officer

    £80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    Day In a Page

    A roller-coaster tale from the 'voice of a generation'

    Not That Kind of Girl:

    A roller-coaster tale from 'voice of a generation' Lena Dunham
    London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

    London is not bedlam or a cradle of vice

    In fact it, as much as anywhere, deserves independence
    Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

    Vivienne Westwood 'didn’t want' relationship with McLaren

    Designer 'felt pressured' into going out with Sex Pistols manager
    Jourdan Dunn: Model mother

    Model mother

    Jordan Dunn became one of the best-paid models in the world
    Apple still coolest brand – despite U2 PR disaster

    Apple still the coolest brand

    Despite PR disaster of free U2 album
    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments