RSS feedsThe taxman has announced an extension to the deadline on its amnesty for individuals to come forward with tax liabilties arising from offshore bank accounts.
The offshore disclosure facility – or NDO - will now run until 4 January instead of closing on 30 November.
Reaction from advisers was prompt. Gary Ashford, national head of tax dispute resolution at RSM Bentley Jennison said he was not surprised by the move.
“It was always going to be a tight deadline for banks to inform their clients that account information had been passed to HMRC and an even tighter deadline for clients then to be able to make an informed decision to contact the authorities.”
308 banks were contacted by HMRC to disclose details of overseas account holders. Those individuals now have until the New Year deadline to come forward to give notice that they have potential liabilities. Meeting the deadline means account holders can pay their unpaid tax with a lesser penalty. The final deadline for payment remains 12 March 2010.
John Cassidy, tax investigations and dispute resolution partner at PKF Accountants & business advisers, called for an extension to the deadline early this week and commented: “This extension shows that HMRC is finally taking a common sense approach to making this amnesty work.”
HMRC is expected to make good use of the next five weeks by writing to more individuals holding offshore accounts: to date it has only written directly to around 35,000 offshore account holders, PKF said.
John Cassidy added: “Most of the banks that HMRC has approached for account holder details have yet to supply them – there could be another 150,000 individuals for HMRC to contact.
"This is vital because, my experience shows, that only a personal letter from HMRC really motivates people to come clean on tax inequalities – the more people they can write to before 4 January, the more money the amnesty will collect.
"We have had more enquiries about the NDO in the few days since the first batch of HMRC letters arrived than in the whole period since the NDO started on 1 September – with every individual mentioning a letter from HMRC."
Ashford also chairman of the CIOT’s Management of Taxes Sub-Committee, added:
"This is a sensible and realistic move which recognises the lack of time under the original deadlines. As we envisaged, there hasn’t been enough time to sort out all the information from the various banks."
“The new deadline should work, even if it might mean an uncomfortable Christmas for some taxpayers.”
The Times reports this morning a poor response to the amnesty although many advisers expect a last minute rush from clients attempting to meet the deadline over the Christmas holiday.
This is the second amnesty run by HMRC. The first produced tax revenues of £400m after 45,000 offshore account holders came forward.
Meanwhile, another for account holders in Liechtenstein has also reportedly seen little enthusiasm from account holders. The Times reports fewer than 30 individuals have come forward to declare income held in accounts based in the principality.
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