HM Revenue have confirmed to the Chartered Institute of Taxation, and other members of the Compliance Reform Forum, that there will be a second Offshore Disclosure Facility, or “opportunity” as it now being referred to as, some time next year. The exact details have yet to be agreed and HMRC are enlisting the help of the CIOT and other professional bodies to make a contribution to the design of the new opportunity”

The HMRC statement on this can be found on the CIOT website. There may be a more public announcement in the Pre Budget Report.
 

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Back in July we reported that a second “Tax Amnesty” was being seriously considered by HM Revenue & Customs. Since then we have heard nothing further until a report in Accountancy Age which confirms that HMRC are still considering this but are looking for a high profile prosecution to act as deterrent but are apparently having difficulty finding one.

With a new Chief Executive, Lesley Strathie, in charge at HMRC a second amnesty might be one of her first announcements. Alternatively it might turn up in the 2008 Pre Budget Report which is now expected to be in mid November.

If you find yourself in the position of having undisclosed income (overseas or UK) it probably makes sense to approach HMRC before they come to you. You should seek professional advice on this subject as a disclosure (and the subsequent enquiry by HMRC) needs to be managed carefully and can be fraught with difficulties.

A new penalty regime is being introduced which, in some circumstances, is much tougher than previously. It is unlikely that a prompted disclosure under the new regime would incur a penalty of less than 35%. If HMRC have already written to you about an offshore account they may take the view that you have been prompted!
 

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According to the Sunday Times HM Revenue & Customs are planning another go at trying to persuade those with undeclared overseas bank accounts to come forward. This time they are not expected to be as generous as the first time and in some cases they will be tough. Dave Hartnett, the acting Chairman of HMRC is quoted as saying:

“Some people will go to jail — I have no doubt about that, for example where they have lied to us during a previous investigation. We do not tolerate that at all.”

There are no details as yet of the mechanics of the new arrangements but if you have something you think should be disclosed you should contact your professional adviser before HMRC contact you.

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As the 26 November deadline for making disclosures under the Offshore Disclosure Facility approaches it has was reported last week that HM Revenue & Customs are considering a second “tax amnesty”. An HMRC spokesperson has confirmed that plans are being put in place to repeat the ‘amnesty’ that was carried out earlier in the year. She says:

“Yes there will be another facility but we’re not sure when or how that will operate.”

As my colleague Lisa Spearman related back in September the Revenue has widened the scope of its enquiries into offshore accounts. However last week’s reports are slightly at odds with the message being given out on the Revenue website which reads:

“HMRC is pursuing those with offshore accounts and tax liabilities who have not notified. After 26 November we will continue to pursue those who decide not to disclose. In these cases the penalties could be 100% of the tax due and in exceptional circumstances criminal investigation may be considered.”

In fact, today, it appears that HMRC are already backtracking on the idea.

It would appear that the disclosure facility was not as successful as HMRC had hoped and they may now want to encourage those who didn’t disclose the first time around to come clean. Perhaps the Revenue will give more publicity to a second amnesty if , and when it appears?

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