Taxman extends evaders' amnesty deadline

The deadline for individuals with money sheltered offshore to register for reduced penalties under Her Majesty's Revenue & Customs' tax amnesty has been extended.



Rather than having to register no later than November 30th for the New Disclosure opportunity, offshore account or asset holders now have until January 4th 2010.



Although the official reason for the extension is "fairness", HMRC said, some advisers will say it is to increase take-up of the facility, which they say has been slow.



Tax officials preferred that banks on the receiving end of disclosure notices needed more time to hand over the required information to HMRC and to inform their customers.



At the last count, HMRC said more than 300 banks were providing information on offshore customers, which will be used to ensure each one is paying "the right tax".



Coming forward before January 4th, guarantees taxpayers a reduced penalty of 10 per cent - imposed for full disclosure where no previous invite to disclose had been made.



A higher penalty (of 20 per cent) will apply where taxpayers were contacted by HMRC as part of the Offshore Disclosure Facility (ODF) in 2007 but did not make a disclosure.



The reduced penalty regime may soon appear even more favourable, if tax advisors are right that HMRC is looking to increase penalties to more than 100% of the tax due.



"Some bank customers will not be contacted by their banks in good time for the original deadline of 30 November so in the interests of fairness we have decided to extend our deadline by a month to 4 January," said Dave Hartnett, HMRC's permanent secretary.



"I strongly urge anyone who has been hiding taxable assets offshore to go on line and register. The NDO is voluntary but from the start of the New Year we will begin to investigate those who were eligible to use the NDO but instead buried their heads in the sand."



Once the NDO's window for full disclosure closes on 12 March 2010, taxpayers who kept quiet but are found to have unpaid tax liabilities will face penalties between "30% rising to 100% of the tax evaded," HMRC said, and risk prosecution.