New disclosure opportunity - CIOT welcomes release of initial details

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Thursday, 04, Jun 2009 12:00

The Chartered Institute of Taxation (CIOT) welcomes the release by HMRC of some of the details of the forthcoming New Disclosure Opportunity (NDO). The NDO, announced by the Chancellor in the Budget, will encourage taxpayers with undisclosed income from an offshore account to disclose their income and suffer a limited penalty.

The CIOT, together with other representative bodies, is working with HMRC with the intention of making the NDO work as effectively and efficiently as possible. We have a number of concerns regarding the initial proposals and we understand that these are currently being considered by HMRC as the plans are refined.

Gary Ashford, Chairman of the CIOT’s Management of Taxes Sub-Committee, says: "Those people who have not declared offshore income have evaded tax and we do not condone tax evasion in any way. However, it makes every sense to help such people regularise their tax affairs, particularly as many will have fallen foul of the law through mistake or misunderstanding."

The NDO has been welcomed by the CIOT who have applauded the advance notice of the scheme. The CIOT hopes that this will lead to further publicity from HMRC once the scheme is up and running and potential disclosers have the opportunity to disclose.

Gary Ashford continues: "We are pleased that a number of our recommendations have been accepted, including that the flat rate penalty for those who had no previous invitation to disclose should be 10% in line with the previous Offshore Disclosure Facility (ODF) and that, importantly, tax advisers will be able to file online on behalf of clients."

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For press information contact Simon Goldie on 020 7340 0569 (direct line), 07879 497316 (mobile). Email sgoldie@ciot.org.uk

Notes for editors

1. The ‘New Disclosure Opportunity’ was formally announced by the Chancellor in the Budget on 22 April. It is expected to be available from the autumn and run for a limited period.

2. Further details of the scheme are available on the CIOT Technical Newsdesk. To read them please click here.

3. The NDO follows the ‘Offshore Disclosure Facility’ (ODF), which ran from 17 April 2007 to 22 June 2007 and involved taxpayers disclosing previously undeclared foreign income in return (in most cases) for a fixed 10% penalty. This exercise led to many thousands of taxpayers owning up to undisclosed offshore income and tax recoveries of some £400m. Some of the administrative arrangements surrounding the ODF were criticised by advisers, including the lack of publicity for the arrangements from HMRC and that there was no dedicated facility for tax advisers to file online on behalf of clients.

4. Both the ODF and the NDO are linked to the success HMRC have had in obtaining orders requiring banks to disclose details of taxpayers holding offshore bank accounts.