HMRC today unveils promised ‘final’ disclosure facility

As it said last month that it was planning to do, HM Revenue & Customs today unveiled the details of what it called its “new last chance saloon for offshore evaders”, as it also revealed that 44 individuals acting as “professional enablers” are currently under criminal investigation for offshore offences.

The new  Worldwide Disclosure Facility, first mentioned in the Government’s 2015 Autumn Statement, represents the “final chance for those few still dragging their feet to put things right with any outstanding tax on undeclared offshore money or assets”, HMRC said today.

The new online disclosure facility, it added, provides tax evaders with a “last chance to come forward and settle tax on their wealth hidden offshore”,  ahead of new data sharing arrangements and tougher penalties being introduced.  The major data sharing arrangement for most people is the so-called Common Reporting Standard, sometimes called the Global FATCA, which has been heavily promoted by the Organisation for Economic Cooperation and Development, and is due to begin coming into force around the world next year.

A number of other countries have also announced disclosure facilities and tax amnesty schemes ahead of the CRS, including Argentina and Indonesia.

As reported,  HMRC said back in August that it was planning to launch a new “tax amnesty” type programme on 5 September, to be known as the Worldwide Disclosure Facility, or WDF, with details to be revealed on the day it went live.

HMRC has introduced disclosure facilities in the past, a major one being its Liechtenstein Disclosure Facility, which ran from September 2009 until the end of December.

The WDF, therefore, “will be the final chance to come forward before we use CRS data and toughen our approach to offshore non-compliance”, HMRC said.

After 30 September 2018, new and “tougher” sanctions under what HMRC is calling its “Requirement to Correct” programme will be introduced, which are currently being consulted on, but which HMRC said will reflect its “toughening approach”.

One option being considered, it noted, is a minimum 100% penalty – significantly higher than the current minimums.

“You can still make a disclosure after that date but those new terms will not be as good as those currently available,” it said.

To see the details of the new disclosure facility and how it works,  click here.

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Separately, HMRC also announced today that it had collected £3bn thus far under a controversial programme whereby those who are under investigation for tax avoidance are forced to pay the disputed tax immediately, known as the accelerated payment notices (APN) scheme.

According to HMRC, the £3bn was collected from many of those who received some of the 60,000 APNs that it has  issued since new rules introduced in 2014 forced tax avoidance scheme users to pay up front while their tax affairs were investigated, rather than at the end of the investigation period.

Under the scheme, a taxpayer with an outstanding tax bill has 90 days to pay, once an APN is received, or else make representation to HMRC if they consider the notice incorrect.

HMRC said it had also “successfully defended the accelerated payment rules in five out of five Judicial Review challenges”, and that its overall percentage of wins in litigation cases brought against it stands at “almost 90%”.

It noted that it had won its latest APN case, a High Court ruling brought by tax avoidance scheme users, in which HMRC’s decision to issue APNs on a scheme that companies had used to try to reduce their tax bill had been challenged by taxpayers who argued that the tax authority hadn’t properly arrived at the amounts included in the APNs.

This, it said, meant that the APNs issued in connection with the case “will stand, protecting an estimated £28m in disputed tax”.

ABOUT THE AUTHOR
Helen Burggraf
Helen Burggraf is the editor of International Investment. A US-trained journalist, she has worked in Rome, New York City and London, covering everything from the fashion and retailing industries to the global drinking water and water-treatment sector, private equity, and most recently, the international cross-border financial services/advice industry.

Read more from Helen Burggraf

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