HMRC has warned its new disclosure opportunity (NDO) will be the final chance for people with unpaid taxes linked to offshore accounts to settle up.
The NDO is designed to be the last opportunity for people to make a complete and accurate disclosure between 1 September 2009 and 12 March 2010, qualifying for a 10% penalty, or face the risk of jail.
Those who shun the chance and are subsequently found to have undeclared tax liabilities are likely to face a penalty of between 30% and 100% of unpaid tax, plus run the risk of criminal prosecution, warns HMRC.
Customers will be able to contact HMRC on paper or through a dedicated area on the website.
The penalty rate of 10% will also apply to those who were not contacted by HMRC under the Offshore Disclosure Facility (ODF) in 2007, which primarily focused on the customers of five large banks.
Those who turned down the offer of the 10% rate under the ODF and now want to disclose will be hit with a 20% penalty on unpaid tax.
"I would urge anyone with offshore accounts holding untaxed income or gains to take advantage of this simple and straightforward scheme," says Stephen Timms, financial secretary to the Treasury.
"Most offshore investors already pay the tax that the law requires and it's only fair that everyone respects the rules," he adds.
However, the NDO has come under fire as a cheap way for HMRC to collect revenue and has been branded a "bribe to save" scheme by PKF Accountants & Business Advisers.
The firm believes the NDO is a way of helping to plug the £32bn tax shortfall of 2008/09 and warns it could be a sign HMRC aims to investigate fewer tax cases.
"While this type of facility is welcomed and will enable a lot of individuals to get back on an even tax keel, I hope that it will not eventually reduce the effort HMRC puts in to traditional investigation work," says John Cassidy, tax investigations partner at PKF.
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