Stop press: this amnesty is now closed

HMRC agrees that similar terms will apply to on-shore income if it is disclosed voluntarily, as will apply under its New Tax Offshore Disclosure Opportunity (NDO).

Back in August, HMRC launched the NDO under which it offered those with undisclosed offshore income to declare it subject to a fixed tax penalty of 10%. At the time, HMRC refused to be drawn on whether the NDO fixed penalty would apply to non-offshore cases. It now says that on-shore income is disclosed the penalty will be lower than if it were prompted by HMRC action, so, 10%.

This does not mark a change in HMRC's policy, it is that a voluntary disclosure is treated more lightly under its new tax penalty regime.

HMRC has now written to 308 banks asking for details of customers accounts. However, sources at HMRC, say that the number of individuals taking up the NDO are extremely low.

It is concerned that tax advisers have been recommending that their clients make a disclosure under the far more lenient terms granted in its Liechtenstein disclosure facility.

The confusion prompted HMRC's Dave Hartnett to speak out. He told Accountancy Age that taxpayers cannot just use the one that suits you best."

Q & A

What are the time limits?
For the NDO: notify your intention to make a disclosure by 30 November 2009, and disclose by 31 March 2010.

If you miss the deadline, consider transferring foreign assets which have not been declared to take advantage of the Liechtenstein disclosure facility you have until 2015 on that one.

For on-shore disclosures: there is no time limit, but any delay may count against you as the disclosure is voluntary.

Where do I make an on-shore disclosure?
On-shore disclosures (i.e. UK souce income) should be made to:
HMRC Local Compliance, Parkway House, 49 Baddow Road, Chelmsford, Essex, CM2 0XA.