New Disclosure Opportunity – Deadline Extended to 4 January 2010

Have you just received a letter from an Offshore Campaign Manager in H M Revenue and Customs about the New Disclosure Opportunity or NDO? If so, it will have told you that there is a deadline of 30 November for initial action.

Well, the good news following an announcement on 27 November is that you now have until 4 January 2010 for the initial step but the matter still requires your urgent consideration.

The letter does not necessarily mean that you have failed to report any interest on your tax return. But it does mean that HMRC know that you have an offshore account with one of about 300 banks (any account held outside the UK even if all your contacts are with a UK address) and already know exactly how much interest you have earned.

To save HMRC the enormously time-consuming task of tracking who has and who has not declared all their interest, taxpayers are being offered the opportunity to self-report any under-declared interest. As an incentive, in most cases HMRC will accept a flat rate penalty (fine) of just 10% of any unpaid tax and, in a few cases, no penalty at all. Failure to use the opportunity will mean that if the Revenue subsequently establish that you had under-declared your interest, they will be looking to exact a much tougher penalty - possibly up to 100% of any unpaid tax.

These are conditions attached but the most immediate one is the need to register an intention to make a disclosure. The initial registration process is very simple; the real work comes in preparing a report. The deadline for initial registration had been 30 November but this has been extended to 4 January 2010 apparently in recognition of the low level of initial registrations and concern by the banks that they have not had time to notify their customers of what they have already told HMRC.

After registration you would have until either 31 January 2010 or 12 March 2010 to report full details and pay the tax, interest and penalties. There is presently no indication that these deadlines are being extended.

Even if you need to report something to HMRC, the NDO may not be the best way to do it. Professional advice will help you decide what is most appropriate for your particular circumstances.

For more information and advice, please immediately contact either of our former Inspectors of Taxes, Doug Robshaw or Will Silsby on 01905 732100.

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