A 200% penalty will be imposed on tax evaders with offshore bank accounts who fail to declare under the New Disclosure Opportunity (NDO), it was announced in the Pre-Budget Report today (Dec 9th).
The surprise move comes a fortnight after the deadline for coming forward under the NDO was postponed from the end of November to January 4 in order to give people more time to disclose their offshore accounts.
A slower than expected uptake of the NDO is widely thought to be behind the move to extend the cut off date. HMRC as good as admitted this was the reason when it said the decision had been taken in order to give banks more time to notify clients that their bank details were in the hands of HMRC.
Paul Roberts, head of tax investigations at Grant Thornton, said: "It has been estimated that 100,000 people have offshore taxable assets from savings accounts or property which is potentially subject to the NDO, yet fewer than 10,000 have so far taken advantage of the initiative.
"Such a draconian penalty relating to tax evasion existed for many years but fell away in the late 1980s. This demonstrates the resolve of HMRC to follow through its threat to punish those who have not taken advantage of both the NDO as well as the earlier Offshore Disclosure Facility."
A new requirement for people to notify HMRC when opening offshore accounts in certain jurisdictions has also been brought in.
Roberts added: [The new requirement indicates] HMRC will stop at nothing to claw back missing tax revenue to UK shores. The severity of HMRC’s pursuit should come as no surprise as David Hartnett has consistently made it clear that there is no second chance."
