Storm over tax 'amnesty' security checks

Sunday 27 September 2009 00:00
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Measures to get Britons to own up to unpaid tax held in offshore bank accounts have come under criticism for poor security. Commercial law firm McGrigors warns that the new tax amnesty registration system is open to abuse.

In this year's Budget, a new disclosure opportunity (NDO) was announced giving UK residents with tax liabilities connected to an offshore account a final chance to declare and settle the sums owed, with the incentive of a reduced penalty rate. But, according to McGrigors, the email notification system behind it fails to put in place checks needed to stop individuals impersonating another taxpayer.

As things stand, postal notifications require a name, address, National Insurance number and date of birth, while the email registration system only asks for a name and address. McGrigors warns that this prevents HM Revenue and Customs (HMRC) from being able to check whether the applicant is genuine.

"Anyone with a grudge can now submit another individual's name and address via the email registration process, flagging them up to HMRC as someone who has unpaid taxes," says Phil Berwick, director of tax investigations at McGrigors.

There are already phone hotlines allowing people to tip off HMRC which Mr Berwick says are misused by those making false reports.

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