Untaxed offshore savers face 200% penalty

by Gill Montia

Story link: Untaxed offshore savers face 200% penalty

The Chancellor of the Exchequer is raising the penalty for offshore bank account holders who haven’t come clean with HM Revenue & Customs to 200% of tax owed (currently 100%).

In his pre-Budget report, Alistair Darling declared: “I am determined to tackle activities, such as avoidance and evasion, which undermine tax receipts.”

He also confirmed that since April, HMRC has asked for details of at least 100,000 offshore accounts held at over 300 financial institutions.

The new deterrent will come into force once the current “Disclosure Opportunity” ends in January.

The opportunity currently allows offshore account holder to settle up any outstanding tax, plus interest, plus a penalty of 10% of tax owed.

For those making a disclosure on paper, the Revenue expects to receive any unpaid tax by 31st January 2010 and for those revealing all online, the deadline is 12th March.

The first such amnesty took place in 2007, when £450 million was raised by targeting offshore accounts provided by High Street banks.

Around 45,000 people paid their dues but the outcome was generally thought to have been disappointing.

The largest single payment under the scheme was £3 million and the average was £9,000.