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Tax advisers say the amnesties lack bite

Tax advisers say the amnesties lack bite

HMRC tax amnesties are not as effective as it would have hoped according to some tax advisers who think the Revenue should take a more constructive approach to the problem of tax evasion.

They think that holders of offshore bank accounts could be calling the taxman’s bluff and standing firm rather than coming forward and making voluntary declarations.

The Revenue had hoped that the tax amnesties would entice people to own up to previously undeclared liabilities but only about 2,000 have come forward out of the tens of thousands who are believed to have undisclosed income. The Tax Health Plan was aimed at over 28,000 doctors but so far only 1,500 have come forward. And only 419 people have come forward under the Lichtenstein Disclosure Facility which aims to spotlight holders of undeclared offshore accounts, even though HMRC has obtained client offshore bank account details from 308 banks.

New legislation comes into force in Lichtenstein next month which means that banks and financial advisers in the principality have 3 months to inform any client that they suspect may have undeclared taxable income that it must be disclosed.

HMRC has fought back against claims that the amnesties aren’t working and says it will stick to its guns and encourage people to make voluntary disclosures. The Revenue has however confirmed that those people who do not, may be subject to criminal prosecutions.

HMRC said they are pleased with the results of the Tax Health Plan which revealed £9m in undeclared income and reminded the sceptics that the LDF runs until 2015 and since March the number of people coming forward under the scheme has increased significantly.

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Image: Fake by Jim Sneddon

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