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New Offshore Disclosure Initiative Launch PDF Print E-mail
Tuesday, 28 July 2009 00:00

HM Revenue & Customs (HMRC) has confirmed the details of a new disclosure initiative that will allow people with unpaid taxes linked to offshore accounts or assets to settle their tax liabilities at a favourable penalty rate.


Under the New Disclosure Opportunity (NDO) people who make a complete and accurate disclosure between 1 September 2009 and 12 March 2010 will qualify for a 10% penalty. Those who choose not to take this opportunity and are subsequently found to have undeclared tax liabilities are likely to face a 30% or higher penalty and also run an increased risk of criminal prosecution.


The procedure is simple and straightforward. Taxpayers will be able to contact HMRC on paper or through a dedicated area of HMRC website.


To use the NDO, a notification of the intention to disclose must be made to HMRC between 1 September and 30 November 2009.  This can be made by phone, on paper or electronically. Those notifying on paper can do so from 1 September to 30 November and those notifying electronically can do so from 1 October to 30 November.


Once a notification of the intention to disclose has been submitted, disclosures can then be made:

-       on paper from 1 September 2009 to 31 January 2010

-       electronically from 1 October 2009 to 12 March 2010.


The penalty rate of 10% will apply to those to whom HMRC did not write to under the Offshore Disclosure Facility (ODF) in 2007 which ran from April to November 2007.


Those to whom HMRC wrote to in 2007 offering the 10% rate but did not complete the ODF procedure and now want to disclose will have an opportunity to do so with unpaid tax attracting a penalty of 20% which is more favourable than normal whilst demonstrating that special rates once declined are unlikely to be repeated.


Once this disclosure window closes on 12 March 2010, those taxpayers who have not come forward but are subsequently found to have unpaid tax liabilities will face penalties of at least 30% rising to 100% of the tax evaded. They also run a risk of criminal prosecution.


If you think you may be affected by this please contact us on 020 8964 4420.


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