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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Last year HM Revenue & Customs launched the Offshore Disclosure Facility to enable those with undisclosed interest from offshore bank accounts to come clean and report the omissions and pay the tax, interest and a 10% penalty.

Before the facility closed on 26 November 2007 it was being reported that the facility had not been as successful as the Revenue had hoped.

Today the Revenue are implementing the second phase of the attack on offshore account holders by issuing letter to around 5,000 account holders who did not come forward last time. This time, as well as having to pay the tax and interest the Revenue has stated that any penalty is:

“..unlikely to be less than 30%”

If you are in the position of having undisclosed income you should seek professional advice as soon as possible. Next time it could be the maximum penalty of 100% of the tax or even a criminal investigation.

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The BBC reports that HMRC is to expand its enquiries into offshore accounts beyond the High Street banks. Many people received letters this summer explaining that their bank had given details of customers with offshore accounts to HMRC and this process has led to the so-called amnesty which was set up for people to come forward before 22 June 2007.

It now appears that HMRC has turned its attention to other private banks and investment houses. If you receive a letter from your bank and/or HMRC about this and you have any reason to be concerned please contact us for further advice.

In the majority of cases there will be nothing to report because the account holder may be taxable only when funds are brought to the UK.

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