Offshore account holders 'may not even notice' NDO

Many offshore bank account holders could risk penalties for ignoring HMRC's New Disclosure Opportunity (NDO) its poor promotion of the tax amnesty, says leading accountancy firm, PKF.

HMRC will launch a New Disclose Opportunity (NDO) in September, designed to collect undeclared tax from offshore bank account holders, but many individuals "may not even notice," warns John Cassidy, tax investigations partner at the firm.

He believes it is widely thought the last amnesty, the Offshore Disclosure Facility (ODF) in 2007, was "poorly publicised" by HMRC.

The take up rate was "significantly lower than expected," largely because many of the offshore bank account holders potentially affected knew little about it.

"Sadly, HMRC spent lots of time and effort putting the ODF in place but barely any effort in promoting awareness of it," he says.

Unlike the "shop your plumber scheme," there was no major press or TV campaigns promoting the ODF, despite the HMRC expecting it to yield far more tax revenue, says Cassidy.

HMRC only wrote to customers of the five UK banks, yet buried in the small print on its website, HMRC said any UK individual or business could have used the ODF.

Furthermore, the ODF applied to all tax irregularities, including onshore ones, despite having the title of Offshore Disclosure Facility, discouraging people with onshore tax arrears to come forward and benefiting from the 10% penalty rate.

"This time round HMRC must invest in a comprehensive publicity campaign in the national media and must also promote the new disclosure opportunity in foreign language newspapers and other media serving foreign nationals living in the UK," says Cassidy.

"Some non-domiciled individuals may benefit from using the NDO and need to be told it applies to them," he adds.