By Simon Read HM Revenue & Customs (HMRC) could offer an amnesty for people with undeclared money...
By Simon Read
HM Revenue & Customs (HMRC) could offer an amnesty for people with undeclared money hidden in offshore accounts, according to reports.
The tax agency has refused to confirm the amnesty, but revealed there are ongoing discussions with banks and accountants looking at ways to encourage people with offshore accounts to volunteer information about their untaxed income.
It is estimated there is as much as £180bn stashed by Brits in offshore accounts but HMRC has been taking an increasingly tough approach to the situation. It won a landmark legal victory against Barclays Bank last year, which allowed the agency to force the bank to hand over details of thousands of clients' offshore accounts. HMRC estimated the decision would allow it to recover around £1.5bn in unpaid taxes from Barclays' customers.
With HMRC seemingly being given powers to demand details of other banks' clients overseas accounts, anyone who holds an offshore account or property could receive a letter from the Government inviting them to account for what they hold and how they acquired it, and to consider whether any UK tax arises from its possession.
However, the Government would prefer people to volunteer details and it is this desire that has led to rumours of an offshore amnesty, possibly as soon as this spring. It is suggested the amnesty could mean penalties for individuals who come forward with hidden offshore funds could be capped at around a 10th of the tax owed.
There was some expectation the Chancellor would make mention of the amnesty in his pre-Budget report in December. With no announcement forthcoming, attention is now being focused on March's Budget, although HMRC is remaining tight-lipped. "We discuss a wide range of issues. These discussions are confidential," said a spokesperson.
A partial amnesty seems the most likely outcome with anyone volunteering information about their overseas stash facing penalties of between 10%-25% of the back tax owed.
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