The UK Extents Tax Amnesty
By: Ainsley Brown
In a very surprising move HM Revenue & Customs (HMRC) has extended it tax amnesty program – the New Disclosure Opportunity (NDO).
The NDO was set to expire on November 30 of this year but has been extended to January 4 of next. Under the program tax payers with undisclosed offshore accounts nestled away in any number of one or more tax havens are given a chance to come clean with UK taxman. The tax payer would pay a relatively small penalty – 10% as compared to a 100% penalty – on any back taxes owed but would also avoid the risk of prosecution.
All in all the NDO doesn’t sound like a bad deal or is it?
As good a deal as the NDO sounds, it seems that it hasn’t had as many takers as the HMRC would like. This lack of uptake helps to explain the unexpected extension. The NDO after all was designed as a very enticing carrot by HMRC in hopes of boosting its falling tax revenues by allowing tax evaders to avoid the very large stick of a 100% penalty and or prosecution.
There are two possible explanations for this lack of uptake. The first and least likely is that there are very little, if any, taxpayers out there holding undisclosed offshore accounts. The second and more likely explanation is that taxpayers a hedging their bets, say to the taxman: catch me if you can. Taxpayers know, even amongst the accounts already disclosed, that it is a very time consuming and more importantly expensive venture to trace funds in offshore accounts.
