The Chartered Institute of Taxation (CIOT) has welcomed HMRC's release of details of the forthcoming New Disclosure Opportunity (NDO).
Announced in the Budget, the NDO is designed to encourage taxpayers with undisclosed income from offshore accounts to disclose it and pay a penalty or face further action.
The NDO will run from autumn 2009 until March 2010, giving offshore account holders "one final opportunity" to put their affairs in order.
There is a penalty of 10% for full disclosure if account holders have had no previous opportunity, but fines will be higher for full disclosure if account holders had the chance before.
HMRC is seeking to obtain details of offshore accounts and assets from hundreds of financial institutions, ensuring it will be able to pursue those who choose not to disclose tax owed as quickly as possible, warns CIOT.
During the disclosure period all account holders will know HMRC has, or will soon have their details and have successfully applied to get details from a number of banks, it says.
HMRC says the NDO is the final opportunity is disclose in advantageous circumstances and urges anyone who thinks they have unpaid tax contributions connected to an offshore account to come forward.
If there are unpaid liabilities, this will "almost certainly" mean a higher penalty fine at least, it warns. HMRC says it will use its enquiry and inspection powers to approach customers with undeclared liabilities and "vigorously purse" all outstanding taxes.
HMRC will make it as straightforward as possible for people to disclose, despite offshore account structures' complexities. It will also work with financial institutions and customer representative bodies to further simplify the disclosure process.
However, CIOT has concerns over some of the initial proposals, which are currently being considered by HMRC as plans are refined.
"Those people who have not declared offshore income have evaded tax and we do not condone tax evasion in any way," says Gary Ashford, chairman of the CIOT's management of taxes sub-committee.
"However, it makes every sense to help such people regularise their tax affairs, particularly as many will have fallen foul of the law through mistake or misunderstanding," he says.
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