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Contractors urged to declare offshore bank assets to HMRC and avoid harsh penalties
Posted Jun 17, 2011
A specialist accountancy firm has urged any contractors who have undisclosed offshore bank accounts to come forward and avoid paying hefty HMRC penalties
As part of its ongoing attempts to claw back billions in unpaid taxes over the next few years, HMRC have said that they have already identified 500,000 people who have funds stored in offshore accounts.
Contractors who do not declare any offshore deposits could face penalties of up to 100% of the amount of unpaid liabilities, plus interest.
This latest tax avoidance warning from HMRC, delivered to the mainstream press in a 'subtle' way rather than via any type of formal news release, comes two years after HMRC won the right to see details of offshore assets held by UK citizens.
In 2009, The Special Commissioners ordered over 300 banks to reveal the details of half a million UK taxpayers who held offshore accounts in tax havens such as the Channel Islands and British Virgin Islands.
HMRC has collected data as a result of this ruling, as well as via the services of 'whistleblowers'.
The tax authorities believe they have identified over £13bn in offshore assets, which would yield hundreds of millions to help boost the Treasury's coffers over the next few years.
Ignorance of the law is not an excuse
Martin Hesketh, MD at service provider Brookson, commented:
"Although there is nothing illegal about having an offshore account, there is an obligation for UK resident individuals to disclose sources of taxable income to HMRC.
"HMRC will not tolerate ignorance of the law as an excuse so it's vital that contractors are certain of their compliance status.
"It makes sense to be sure rather than take the risk incurring penalties and a possible investigation into tax affairs - HMRC will be open to negotiations on penalties if a contractor was to voluntarily disclose they have offshore income."
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