New Disclosure Opportunity - Ernst & Young - United Kingdom

HMRC have released further details of the ‘New Disclosure Opportunity’ (NDO) (the new tax 'amnesty') that was announced by the Chancellor in the 2009 budget. 

 Key details 

1. Notification of the intention to make a disclosure must be made between 1 September 2009 and 30 November 2009.  A facility to enable notifications to be made online will be available from 1 October 2009.
   
   
2. Disclosures on paper may be made from 1 September 2009 until 31 January 2010. Online disclosures can be made from 1 October 2009 until 12 March 2010.
   
   
3. A fixed penalty of 10% will be applied unless the person making the disclosure had previously received a letter from their bank or from HMRC in 2007 in connection with the original tax ‘amnesty’ (known the ‘Offshore Disclosure Facility’).  In these circumstances the fixed penalty will be increased to 20%. No penalty will be charged if the tax liability is less than £1,000.
   
   
4. Full payment of all liabilities due must be made at the time the disclosure is made. 
   
   
5. HMRC have stated that this will be the final chance to make a disclosure on these terms.
   
   
6. No immunity from prosecution will be given, although it is considered that it is highly improbable that HMRC will pursue a prosecution if a full disclosure has been made within the terms of this initiative.

Who is likely to be affected?

Any UK resident with unpaid tax liabilities connected to an offshore bank account is potentially affected.  This includes individuals, companies, partnerships and trusts.

The source of overseas capital is of as much interest to HMRC as any undeclared income arising from the account itself.  Typical examples seen under the previous tax ‘amnesty’ in 2007 included:

• People with holiday homes abroad;
• Inheritances received offshore;
• Income earned offshore by UK residents not reported in the UK;
• Remittances by non-UK domiciled individuals not correctly declared in the UK; and
• Undeclared takings from a UK trade deposited offshore.

Under the spotlight
Our August special edition of Under the spotlight focuses on the New Disclosure Opportunity. Download Under the spotlight  210K, August 2009

Also take a look at our brochure Final call – anything to declare?  1.2Mb, September 2009

How can Ernst & Young help?

Ernst & Young’s TCRM team contains a huge wealth of experience in dealing with tax investigations in general, and disclosures of this nature in particular.

If you have any further questions, please visit our FAQs page or contact us.

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