Tax Amnesty, Offshore Disclosure, Why appoint a professional advisor?  

Although HMRC as part of their offshore disclosure literature encourage people to seek professional advice what are the advantages to this?

An expert tax investigation adviser can help you approach the disclosure under the offshore disclosure tax amnesty in a professional and compliant manner. They can look at all aspects of the tax disclosure (including seeing if there are any expenses you can claim) and also make any estimates in such a way that they will be more likely to be accepted by HMRC.

Taking advantage of the offshore disclosure tax amnesty is a serious matter and getting the disclosure of tax evasion wrong can have serious consequences. When you submit the report under the offshore tax amnesty it will eventually be reviewed by specially-trained tax Inspectors who are looking for reasons why your unpaid tax bill is incorrect. The disclosure will be checked against information available to HMRC (such as information provided by the banks) to ensure that a full disclosure has been made. Although there is no guarantee (unlike the Civil Investigation of Fraud procedures) you should not find yourself the subject of a criminal prosecution by HMRC for the specific tax issues disclosed under the offshore disclosure tax amnesty unless you knowingly withhold information or make deceptive or materially false disclosures during the course of the tax amnesty disclosure.

How a Specialist Tax Investigation adviser can help

HMRC's leaflet S101 “Making a Disclosure” and DS101F “Completing the Disclosure Forms” covers the process relating to the offshore disclosure tax amnesty and makes reference several times to the role an adviser can play in your tax investigation.

A copy of these documents and some general advice is available online at https://disclosures.hmrc.gov.uk and you should read these carefully to make sure you understand the process. Here are some specific areas where a good adviser can help:

"How to Calculate what you owe: This could be complicated and you may want to seek independent professional advice"

Where there are a number of taxes involved in the disclosures (such as corporation tax, income tax, National Insurance and VAT) the calculation of the tax due can be difficult. There is only limited advice on the HMRC website and they have stated “We cannot provide individual advice on calculating how much you should pay”. In addition the individual will be expected to calculate the interest due using the factors provided by HMRC. Given the number of different due dates, interest on payments on account due etc this will be a complicated process and easy for someone not versed in taxation to make an incorrect calculation.

"You must include all undeclared UK tax liabilities – not just those connected with offshore accounts…… No disclosure should go back more than 20 years."

The offshore disclosure form will in most instances cover the last 20 years (although there are some instances where HMRC will only go back 6 years). A professional advisor will be able to distinguish between the two circumstances and assist in putting together estimates of any income and expenditure. Many offshore accounts hold capital which has arisen as a result of tax evasion in the UK and to establish what is the right amount takes a lot of time and experience.

"If your records are incomplete you should make your best estimate of the undeclared income and gains and use this to make your disclosure….. We may ask you to justify any estimates you have used…… in some situations you may be able to claim deductions and reliefs. Ask your tax adviser if you need help…."

The outcome of participating in the offshore disclosure tax amnesty is the preparation of a full disclosure form. The items to be included in the disclosure form are defined in the form and you will have to sign a declaration about the accuracy of the statements in it and provide details of all assets held offshore at 5 April 2006. It is far better for a specialist adviser to prepare this disclosure form. They will have experience of producing documents for HMRC and will be familiar with the form and content needed in order to satisfy HMRC. Although it is your responsibility to ensure that everything is accurate and nothing is left out, your adviser can save you time and money by preparing the tax amnesty disclosure and speaking to HMRC Inspectors on your behalf.

If you would like to discuss any possible disclosure to HMRC or any matter to do with the potential tax amnesty or how to deal with any tax evasion difficulties please phone 0800 734 3333 or e-mail scott.gilbert@gilberttax.co.uk now

For more information about the different types of tax investigation cases we deal with on a regular basis please click here.

To find out what some of our clients have said about us please click here.