Take ‘tax amnesty’ chance while you can, says advisor

A leading Lancashire tax advisor has urged people with money in overseas tax havens to make a full disclosure to the tax authorities, warning that it’s only a matter of time before HMRC catches up with them.

The call comes after the UK Treasury announced this week it had struck an agreement with the Isle of Man that aims to clamp down on individuals who keep their money offshore.

The agreement will see an automatic exchange of information on people who have bank accounts on the island.

Under the scheme, longstanding investors and account holders will be able to make a full disclosure of any tax they owe and pay the tax due plus interest and a fixed penalty. The disclosure opportunity will be open from April this year to 2016.

David Bennett, tax partner at Moore and Smalley Chartered Accountants and Business Advisors, said: “This is just the latest in a series of initiatives the government is using to encourage voluntary disclosure through bi-lateral agreements, focused disclosure schemes and increased use of technology to gather information about tax payers.

“This is an opportunity for those with undisclosed bank accounts in the Isle of Man to avoid higher penalties and the possibility of a criminal investigation by coming forward and making a voluntary disclosure. People who are concerned as to whether they may owe tax to HMRC should seek professional advice at the earliest opportunity to ensure they get their tax affairs in order.”

The government’s agreement with the Isle of Man follows a number of other bi-lateral agreements of co-operation in recent years with countries including Liechtenstein, Belize, San Marino and the British Virgin Islands. It is currently also negotiating agreements with Jersey and Guernsey. This forms part of HMRC’s efforts to close the ‘tax gap’, the difference between the tax it could collect and the tax it should collect.