Tax specialists say the offshore amnesty announced today by HM Revenue and Customs could bring billions of pounds into the Treasury.
It is estimated that up to 100,000 people could be affected, generating £5bn in tax for the Treasury.
The amnesty is for UK taxpayers with undisclosed offshore bank accounts who have a limited period of time to notify HMRC, make a full disclosure and pay all outstanding tax.
Chiltern head of tax investigations Steve Besford says: “This is a really canny move by HMRC. It is a quick win that could bring billions into the Treasury.”
Under the terms of the amnesty, if offshore bank account holders make a full disclosure they will be spared a full investigation and penalties will be restricted to 10 per cent.
The announcement follows HMRC’s court success last year in getting information from banks on holders of overseas accounts. Chiltern says HMRC will be in possessin of the names, so those failing to take advantage of the amnesty look likely to face vigorous investigation.
Besford adds: “HMRC wants to collect the tax owed by the mainstream cases so they can target the serious offenders.”
Aegon Scottish Equitable technical manager Margaret Jago says: ““With this latest announcement we believe many individuals will take up the offer to disclose their details and pay the significantly reduced penalty on the tax they should already have paid.
“The revenue will find that this move will reduce the effort on their part if individuals come forward voluntarily rather than pursuing individuals through banks themselves. People taking advantage of this amnesty may wish to consider using offshore bonds as alternative investments to offshore deposits, as offshore bonds offer the advantage of legitimate tax deferral.”
Individuals have until June 22 to come forward.