Deadline looms for offshore account holders

There are only five working days left for Britons with undeclared money or accounts offshore to avoid hefty penalties and potential prosecution by HM Revenue & Customs.



Although the deadline for providing their financial details is not until March next year, taxpayers must tell HMRC of their intent to make the disclosure by November 30.



If people holding accounts or assets offshore fail to notify HMRC by the end of this month, they will not be able to use the New Disclosure Opportunity , which provides lighter penalties.



Under the NDO, charges are set at 10 per cent, rather than the normal 35 per cent, assuming the taxpayer has not already been asked by HMRC to volunteer their affairs.



Permanent tax secretary Dave Hartnett has said the tax authority could settle the accounts of as many as 100,000 people, if the lower penalties prove as enticing as he hopes.



But take-up of the tax amnesty, and the Liechtenstein Disclosure Facility has been slow, according to official data obtained by law firm McGrigors.



Obtained by the Financial Times, the record shows only 27 taxpayers have registered to use the LDF, since it opened on September 1 with a similar 'lighter touch' penalty regime.



Although HMRC refuses to reveal how many people have signed up for the NDO, the lawyers warned of consequences if the number of registrants is smaller than HMRC wants.



Speaking to the paper, McGrigors said: "If it seems that not many people have come forward under the NDO, this may dissuade others from doing so."



Phil Berwick, the firm's director of tax investigations, added: "HMRC must be concerned that the tax amnesties are not bringing in enough tax evaders.



"Bigger fines are an obvious way to encourage people to comply, although to be effective that must be combined with a real risk of being caught."



The firm expects next month's Pre-Budget Report to "bring further ratcheting up of fines against tax evaders" who fail to come forward under the latest tax amnesties.



"There was a time, in living memory, when HMRC was able to impose penalties in excess of 100% of the underpaid tax," Mr Bewick said. "There is an argument that HMRC should be pushing for a return to that level of penalty."