Tax Amnesty?

The courts have recently required our major banks to release details regarding holders of offshore accounts to the Revenue. HMRC now have a huge volume of information on these issues and are likely to get more as the private banks are likely to follow suit. Offshore accounts also include those held in Channel Islands, Isle of Man and Republic of Ireland.

It would appear that banks will be writing to their clients about details they have given to HMRC.

As a result HMRC are now offering what they describe as "an offshore disclosure facility".

Basically the facility is available if:

You make an initial notification by 22 June 2007 that you intend to make a disclosure.
You must make full disclosure and pay all taxes, duties, interest and penalties by 26 November 2007.
As long as you make a full disclosure of all undeclared liabilities, including those unconnected with an offshore account, HMRC says they will limit your penalty to a fixed penalty of 10% of the tax or duties underpaid, or no penalty on disclosures of untaxed amounts totalling less than £2,500.
You will need to fully disclose all matters that have resulted in tax avoidance in the last 20 years.

Be clear that all of the tax under declared in the last 20 years will still be due, as will statutory interest plus the 10% penalty. The facility is an offer to reduce penalties to 10% - HMRC have powers to charge penalties of up to 100% of the unpaid tax.

There is no problem in having an offshore account as long as you have paid tax the correct amount of tax on the monies deposited and on any interest credited to the account.

HMRC advises that the vast majority of disclosures will be accepted. Decisions will be made and notified by 30 April 2008. However, certain disclosures are unlikely to be settled through the process, particularly:

disclosures which are found to be materially incorrect or incomplete
disclosures from taxpayers where HMRC has already begun an investigation or enquiry
disclosures from anyone suspected of being involved in serious organised crime
disclosures from those involved in wider criminality whose circumstances would result in a criminal investigation in accordance with HMRC’s prosecution policy.

As you may have inferred from this article the facility applies to all undisclosed issues that have resulted in unpaid tax in the last 20 years - if you have never opened an offshore bank account but still have other onshore issues that you want to disclose, you can do so in accordance with this facility.

HMRC have also advised that this facility should not be used for innocent errors as in these circumstances they will only go back 6 years and don't normally seek a penalty.

If you feel that you need to make a full disclosure, we can help. Time is of the essence as your initial notification must be made before 22 June 2007.

		A4G - Which Airport are you going to?
	A4G Accountants for Growth Northams have exclusive rights to the A4G Accountants for Growth resources in the Exeter and Taunton areas. We offer a wide range of business development and help sessions aimed at growing your business and solving the problems you face. Full details are on our web site: www.northams.com – click on the A4G logo on the home page. Every month we focus on one topic which is supported by an A4G Improve and Grow session. Which Airport are you going to? A client recently described his business as a jumbo jet. It was in mid-air with an excellent cabin crew, providing a good service to its passengers and picking up speed. The only thing was he wasn't sure where it was going to land. For most businessmen this is a common problem. Very few sit back and think what their long term overall objectives are. Many hours of hard work can be spent on areas of the business that do not achieve the owner’s goals. The majority of small businesses are started because the proprietor needs an income. Once that target has been achieved longer term questions must be considered. Building an Empire Possible objectives and the strategies you will need to employ to achieve them are: 1. To sustain an income until retirement. If so, you will need to continually adapt to new challenges and not get stuck in a rut. 2. To keep your current level of income but work less hours. In this case you will either need to look for that elusive manager to take over much of your role or develop systems so that the business is less dependant on you. 3. Continually grow your business. This will inevitably mean you need to focus on the quality that is likely to make your business a success and use that as the focus of your business practices and marketing. 4. Maximise short-term profits. This may be appropriate if your business has a limited life, perhaps taking advantage of a recent change in government legislation or supplying luxury goods in an economic boom. Businesses like this must avoid long-term commitments but still focus on sales. 5. To sell your business. Most owners do not realise that their business is not the sort that other people would want to buy. They need to concentrate on making it less dependant upon themselves. 6. To pass the business on to the next generation. Remember that not everyone is born to manage but make sure your successor has worked their way through every aspect of the business and learnt the lessons that you learned while building the business originally. We can help you identify and focus on what your objectives are and then help put your business in the best state to achieve them. Speak to Colin Gillard on 01404 45994 to see what A4G can do for you.


	DISCLAIMER - PLEASE NOTE: The ideas shared with you in this email are intended to inform rather than advise. Taxpayers circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. If you do or do not take action as a result of reading this newsletter, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.