CIOT: Tax Deals for all
In an unprecedented move HM Revenue & Customs (HMRC) has announced a deal for people who have offshore bank accounts and who may not have disclosed everything that they ought to the tax authorities.
Rather less publicity has been given to a parallel deal for anybody with something to confess to the tax authorities not connected to offshore accounts (the “onshore deal”).
HMRC acquired offshore bank account details from most of the leading UK banks and instead of matching that data with their own records and opening tax enquiries, they decided to ask the potentially offending taxpayers to do all the work for them.
On Tuesday this week they invited taxpayers to come clean in return for either a fixed penalty of 10%, or for no penalty at all if the income or gain that had been omitted was £2,500 or less.
John Andrews, Chairman of the Low Incomes Tax Reform Group, says: “Many people on low incomes might wish to set the record straight with HMRC for small amounts that would attract no penalty, but they will effectively be denied the opportunity. We believe this is unfair and that HMRC should keep this offer open for low income amounts for the whole of this tax year.”
LITRG state that there is nothing inherently wrong with HMRC’s approach but:
The requirement of an intention to disclose must be made within, what will be to many, an impossibly short timescale (by 22nd June 2007)
There is very little support provided by HMRC to those who do not have professional tax advisers
An almost complete lack of publicity and detail is given of the onshore deal
Inadequate help is available for those with special needs, so putting them at a disadvantage.
John Andrews adds: “One final point to note is that this deal should not be taken up by those who have just made an innocent mistake.”
Notes to Editors
LITRG is an initiative of The Chartered Institute of Taxation to give a voice to the unrepresented.