Tax amnesty for investors with offshore accounts

The taxman is being charitable. Well, kinda. He is inviting investors with offshore accounts who have any taxable money in those accounts that they have not told him about, to come and do so now. They have until 22 June 2007 to tell the taxman that they wish to 'fess up, and until 26 November 2007 to spill the beans.

The taxman states darkly: "Using statutory powers, HMRC has obtained from various financial institutions details of offshore accounts and credit cards held by UK residents." This followed a court case in which some banks were ordered to hand over the details to the taxman.

Armed with the long, long list of investors handed to him by the affected banks, the taxman could investigate in order to determine which investors on the list are liable to UK tax. However, to save him the time and trouble of doing so, he would rather the affected individuals came forward instead, and paid the tax. There is talk of a reduced penalty of 10 per cent (rather than 100 per cent) of the undeclared tax, but outstanding interest will be collected, thank you very much. All payments must be made by 26 November 2007. (The Fisherman thinks that with the high interest rates charged on unpaid tax, investors with a large amount of back duty may not regard this as overly generous. Still, beats jail.)

The taxman has said that in a few rare cases, criminal prosecution may be considered, but he expects in most cases simply to take the tax (plus penalty and interest) and leave the people alone.

And what happens to people who don't confess all? Well, they can expect to face the full wrath of the taxman when he finds out. And he will. He has the list, remember?

The Fisherman thinks the amnesty is a good idea, but would just like to point out while the taxman is in such a good mood, that perhaps he might like to consider why the level of tax evasion is as high as it is at the moment. Just a thought.

UPDATE. The taxman has announced that the amnesty will be extended to investors with onshore accounts as well. More information to follow.