Chance to Participate in Tax Amnesty Extended

December 1, 2009 Offshore BankingOffshore TaxationTax HavensTaxation in UK

Day 62The UK’s HM Revenue & Customs (HMRC) has announced that the deadline for their offshore investment tax amnesty program – New Disclosure Opportunity (NDO) – has now been moved forward to January 4th.

Originally the NDO program, which ran from September 1st, 2009, required offshore account holders to disclose their obligations before November 30th. Speculation concerning possible extensions to the tax amnesty circulated throughout the media in the last week before the deadline. On November 27th Dave Hartnett, HMRC’s Permanent Secretary for Tax, finally confirmed the updated timeline for the current tax amnesty. He stated that the primary reason behind the changes was the fact that many potential offshore investment holders had not been contacted by their banks in time to utilize the opportunity which the NDO could provide. The HMRC is currently receiving information from 308 banks across the UK in regards to their NDO program.

The new date for disclosure notification has been extended by five weeks, and now the offshore investment holders must notify the HMRC by January 4th, 2010. The date to make a full disclosure and pay all outstanding taxes, duties and penalties remains the same as originally planned, January 31st, 2010. But offshore bank account holders also have a chance to make the final disclosure and pay all taxes, duties and penalties by March 12th if they decide to do so electronically. Individuals who were not contacted in regards to their offshore investments during the HMRC’s previous offshore investment tax amnesty in 2007, will pay a penalty of 10% on taxes owing, along with appropriate interest and the original taxation amount. Those who were previously contacted by the HMRC but did not disclose during their obligations during the 2007 tax amnesty, will face an increased penalty of 20%. Individuals who do not utilize the NDO and are found to have tax liabilities, will risk facing penalties of 30% to 100% and in some cases criminal prosecution.

In a bid to remind offshore investment holders of their obligations, Dave Hartnett said “I strongly urge anyone who has been hiding taxable assets offshore to go on line and register. The NDO is voluntary but from the start of the New Year we will begin to investigate those who were eligible to use the NDO but instead buried their heads in the sand. Don’t let that happen to you”.

Photo by AdamWilcox