The EU Savings Directive (ESD) came into force on 1 July 2005. EU Member States have to provide information to other Member States about interest paid in their State to individual savers resident in the other Member States. Some countries have opted to levy a withholding tax instead of reporting. However, it is not clear whether those countries may have to report anyway under arrangements other than the EU Savings Directive, e.g. Tax Exchange Information Agreements.
The first reports under the ESD will be made to HMRC on 30 June 2006, covering the period July 2005 to April 2006. HMRC expect the reports generated under the ESD to give rise to numerous Tax Enquiries; particularly with so many UK residents owning properties abroad and needing bank accounts in the same country in order to operate there.
HMRC is currently trying to get details of offshore bank accounts and assets from hundreds of financial institutions.
The tax man says he will aim to make the NDO process as simple and straightforward as possible; although accepting that offshore structures can be very complex on occasions. The Revenue is also warning that there will not be another tax amnesty. Anyone who does not step up for a drink at the last chance saloon is likely to be subject to an in-depth tax investigation and could face significantly higher penalties (over 50%, plus naming and shaming) or even risk criminal prosecution.
The tax men say they have well developed plans to: risk assess all information received; identify all offshore account holders tax resident in the UK who don’t disclose through the NDO; and to “relentlessly pursue” all defaulters.
If you are concerned about an offshore bank account or offshore assets, or have any historic tax liabilities that are worrying you, or think the New Disclosure Opportunity may benefit you: then Lynam Tax Enquiry Experts can help. Call today for a confidential, discreet discussion with our experienced Tax Dispute Specialists.
Call Paul Lynam now on 0845 643 9997