A Government plan to crack down on those who fail to disclose offshore bank accounts has received a ...
A Government plan to crack down on those who fail to disclose offshore bank accounts has received a positive response from both the life and banking sectors.
HM Revenue & Customs (HMRC) announced last month that, for a limited time, people who have failed to pay tax due on money deposited into offshore accounts, and interest earned from them, will be able to use its newly-created Offshore Disclosure Facility.
By making a full disclosure of all undeclared liabilities, penalties will be restricted to 10%. Otherwise, they could be up to 100%.
Simon Hull, managing director of Alliance & Leicester International, said he did not expect the move to have a major impact.
He added it had only received a couple of enquiries from customers following HMRC's announcement. He said: "I am really quite pleased because I think it will legitimise the offshore centres.
"It is like the EU Savings Tax Directive; anything that puts a stamp on it that says we have cleaned it up, just gives us more legitimacy."
Margaret Jago, technical manager at Aegon Scottish Equitable Inter- national, said she believed many individuals would opt to disclose their details to avoid a larger penalty.
She said: "People taking advantage of this amnesty may wish to consider using offshore bonds as alternative investments to offshore deposits, as offshore bonds offer the advantage of legitimate tax deferral."
Grant Thornton has estimated that HMRC will recoup £5bn in unpaid tax through the intiative, but Gerry Brown, technical manager at Scottish Life International, said he believed it would be much less. He said: "There is quite a lot of money being held legitimately in places like the Channel Islands with no tax evasion in mind. I remain to be convinced that the Revenue is going to get billions."
Paul Roberts, tax investigations partner at Grant Thornton, said the initiative was likely to create a lot of work. He said: "Disclosures can be complex, particularly for those disclosing for several offshore assets, as individuals will be required to submit several disclosures."
HMRC must be notified of an intention to make a disclosure by 22 June, and all taxes, duties, interest and penalties must be paid by 26 November.
Ramifications for advice firms
Calling for new advisers to join
Falls to 2.4%
Spent three years in the role
One of many options being 'kicked around'