Offshore bank accounts: New Disclosure Opportunity

HM Revenue & Customs (HMRC) of the UK have announced that the New Disclosure Opportunity(NDO) linked to tax irregularities connected to offshore bank accounts will run from 1 September 2009 to 12 March 2010. Under the NDO taxpayers having unpaid taxes or assets connected to offshore accounts must notify HMRC and disclose the full details within prescribed time limits.

Provided this is done, the penalty is set at 10% of the tax due. However for taxpayers, with offshore accounts with the five largest UK clearing banks, who did not disclose under the 2007 Offshore Disclosure Facility (ODF), the penalty will be 20%.

HMRC have stated that the NDO will be the final opportunity for disclosure. HMRC are in the process of writing to around 300 banks, wealth management firms and other financial institutions. If discovery is subsequently made by HMRC, taxpayers will face far stiffer penalties and in some cases even prosecution.