Tax Amnesty Yields 10 000 Disclosures

January 8, 2010 Offshore BankingTaxation in UK

studying till the sun goes downNearly 10 000 UK nationals have opted to reveal their hidden offshore assets in the HM Revenue & Customs’ [HMRC] tax amnesty program.

The New Disclosure Opportunity (NDO), whose deadline closed on January 4th, is expected to result in £500 million retrieved in unpaid taxes and subsequent penalties over the next three years. The number of declarations is far below that of a similar scheme run by the HMRC in 2007, which yielded 45 000 disclosures. Yet according to HMRC statements, the department is not disappointed with the achieved results, as it has dealt with “more niche banks” with higher-asset base clients.

Having completed the initial steps of its NDO, the HMRC is promising to increase efforts into investigating tax evasion which utilizes offshore accounts to hide assets. The department is currently in the process of acquiring data on suspected tax evaders from over 300 banks across the world. Dave Hartnett, Secretary for Tax at the HMRC commenting on the policy, said “…now [that] the NDO is closed, [the HMRC] is beginning the job of using the data we have obtained from banks to identify people who have not made disclosures despite having hidden their money offshore”. Although many tax experts believe that the tax amnesty will be ultimately less effective than the original attempt, as alleged evaders would have already taken an opportunity to disclose.

Photo by jekert gwapo