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Our Services >> New Disclosure Opportunity / Offshore Disclosure Facility |
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| New Disclosure Opportunity / Offshore Disclosure Facility |
In 2007 HMRC succeeded in obtaining detailed information about UK resident individuals and companies (and others) that held bank accounts in non UK territories. HMRC have long suspected that that much of the funds held in these accounts had wrongly escaped taxation so they launched the "Offshore Disclosure Facility" (ODF) and invited those who may be affected to make a voluntary disclosure and pay any tax, interest and a relatively moderate penalty that resulted from that.
Since then HMRC have been very active, obtaining further information from a wider range of offshore financial institutions and banks, they have now launched a final disclosure facility called the "New Disclosure Opportunity" (NDO). This requires a full disclosure of the material facts and figures to HMRC within strict time limits. Disclosures made under NDO will be tested and any found to be materially incorrect will risk much higher penalties and even prosecution as a result.
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| Main Features of the NDO |
Whilst broadly similar, in principle, to the 2007 facility the main features of the NDO are:
- Taxpayers to disclose unpaid taxes linked to offshore (non UK) accounts and assets and secure a favourable penalty rate.
- Provided some unpaid taxes are linked to non UK issues the NDO also requires the additional disclosure of any other unpaid taxes (including UK source liabilities).
- Notification, full disclosure and payment must be made, within strict time limits (see below), to take advantage of the NDO.
- No penalty due if the total unpaid liability is less than £1,000.
- A 10% penalty rate applies to unpaid liability of £1,000 or over unless a 20% penalty rate applies.
- A 20% penalty rate applies to those who were previously written to by HMRC, in 2007, who then did not make a disclosure under the first (ODF) facility.
- HMRC will review all disclosures and, if satisfied they are complete, confirm their acceptance.
- HMRC will reserve their right to prosecute in "serious cases".
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| Time Limits |
A notification of intention to make a disclosure must be made from 1 September 2009 (for paper notifications) and from 1 October 2009 (for electronic notifications). For either method the notification window closes on 4 January 2010. The notification of intention to disclose must include personal data; including, name, address and date of birth.
Full disclosure, using the prescribed forms and full payment (to include all duties, interest and penalties) must be made by 31 January 2010 (for paper disclosures) and by 12 March 2010 (for electronic disclosures).
Those making an initial paper notification can switch to complete the process electronically and so the absolutely essential key dates to remember are:
- 4 January 2010 – The final closure of the notification window.
- 12 March 2010 – The final closure of the disclosure window.
It is essential that anyone who thinks they may have issues relevant to the NDO seeks appropriate specialist advice now and that most certainly applies to anyone with potentially serious issues. Whilst many advisers are keen to stress the basic features and time limits of the NDO there are additional underlying issues to consider:
- The NDO may not be the best route for some to clear outstanding matters with HMRC; particularly those with serious issues or for whom immunity from prosecution is essential; other options may be advisable.
- NDO disclosures will be 'checked' or investigated and those found to be materially incorrect or insufficient will not benefit from the favourable terms offered and may face prosecution as a result.
- Any disclosure to HMRC must be supported and evidenced so it can be defended if HMRC challenge it; this process must be properly managed from start to finish.
- For those with relevant issues to disclose doing nothing is not advisable; this will be the final opportunity to secure certainty on favourable terms.
We have a significant level of relevant tax investigations experience, a deep knowledge of HMRC's structure, practices, and compliance powers. We have extensive experience of the first 'offshore disclosure' opportunity and are well versed in making appropriate disclosures to HMRC through various routes.
We are available to help you achieve the best outcome through the NDO, or indeed any investigative situation, we can:
- Consider any concerns and explore the potential options that may be available.
- Thoroughly review any residence, domicile issues or other 'offshore issues'.
- Assess the inherent risks.
- Make appropriate disclosures to HMRC.
- Properly manage the disclosure process from start to finish.
- Deal with any questions, challenges or investigation initiated by HMRC.
- Negotiate the best outcome.
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| RTS Investigations Limited (trading as Rooney Tax Services), registered in England & Wales number 07434036. Registered office: 4 Howarth Court, Water Orton, North Warwickshire, B46 1RF |
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