Posted: 26 June 2009
Issue: Vol 164, Issue 4212
Categories: News, Update, Overseas, Tax adviser, Legal, Government
Keywords: NDO, ODF

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20% fine for those targeted by ODF

HMRC have announced further details of the penalties that will be suffered by individuals who make use of the forthcoming New Disclosure Opportunity (NDO).

A 20% fine will be incurred by holders of offshore bank accounts if they reveal details of undeclared income, after having been previously contacted during the Offshore Disclosure Facility (ODF) – the so-called ‘tax amnesty’ – of late 2007.

The individuals concerned will be customers of the five banks – believed to be HSBC, Lloyds-TSB, NatWest, Barclays and one other – that were targeted during the ODF.

‘Those we have not yet caught up with from that group have a second chance,’ said an HMRC spokesperson.

Earlier this month, the Revenue revealed that offshore account holders who were not subject to the previous ‘tax amnesty’ will face a 10% penalty if they respond to enquiries concerning unpaid taxes.

Individuals who do not come forward during the NDO – expected to be launched in the autumn – will be ‘pursued relentlessly’, said the taxman, and they will suffer a minimum sanction of 30% on top of all unpaid taxes.

The Chartered Institute of Taxation welcomed the latest details from HMRC.

Gary Ashford, chairman of the organisation’s management of taxes sub-committee, said: ‘We believe it is significant that the penalty for those who had the chance under the ODF… has been set at 20%, as HMRC have been seeking 30%–35% on such cases where they have already opened enquiries. 

‘HMRC are making this opportunity as attractive as possible by setting the penalty at that level,' added Mr Ashford.

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