New deal tightens net on tax avoiders

Date: 7th September 2009

HM Revenue & Customs (HMRC) has issued another update on its amnesty for undisclosed assets held overseas to save tax.

Permanent secretary for tax Dave Hartnett gave an update on the deal struck recently between the UK and the authorities in Liechtenstein, the BBC reported.

Chancellor of the exchequer Alistair Darling said this month that the agreement could result in around 5,000 investors giving back around £1 billion in total.

This is running alongside the New Disclosure Opportunity (NDO), through which people who have hidden assets can pay a fine of just ten per cent of tax owed if they declare before next March.

Past this deadline, the fine rises to 30 per cent and the risk of prosecution increases.

Speaking to the broadcaster, Mr Hartnett admitted that the deal for Liechtenstein investors differs from the NDO in that it takes in taxes from ten years back or less.

He explained: "There are no Lichtenstein banks operating in London from whom we can obtain data, in the way we can obtain data for others, so we needed a different approach."

Mr Hartnett added: "[The disclosure schemes are] for all those honest citizens that we're trying to find out who the people are who have hidden money offshore, so that government services can be funded and provided ... [they are a] very effective way of collecting the money."

HMRC launched a similar scheme in 2007, raising around £450 million.