At the end of last year there was much press speculation that HMRC might be proposing a tax amnesty for undisclosed off-shore bank accounts. HMRC believe there is around £1.8 Billion of undisclosed bank accounts which should be subject to UK tax. The Times revisited this subject last week.
Following various rulings by the Special Commissioners HMRC now have access to information relating to bank accounts and credit cards. In addition HMRC now automatically receive details of interest credited to accounts held by UK residents in most European countries and some tax havens such as Switzerland and the Channel Islands following the introduction of the European Savings Directive. Because of the sheer volume of information that will be available it is likely that HMRC will be unable to cope.
Some sort of amnesty from penalties is likely to encourage early voluntary disclosure of such accounts. It is unlikely that such disclosure would be completely free of penalties, which under current rules could be 100% of the tax at stake, there might be a cap of say 10% – 25% of the tax. This maybe something that Gordon Brown will announce in his final Budget on 21 March 2007