Tax: Time's running out in tax amnesty declaration scheme
The clock is ticking for those people who registered under the Revenue's recent tax amnesty.
The absolute deadline for submitting the special forms and paying the tax is November 26.
This isn't like the tax return deadline where a few days delay will just cost a £100 penalty.
For those who missed the publicity, the Revenue announced a form of tax amnesty covering people who had hidden offshore bank accounts, investments or assets from the taxman.
To avail of what it called the Offshore Disclosure Facility you needed to register your intention by June 22. On doing that you would have been issued with a special pay slip and a disclosure reference number.
People who have the benefit of having a professional adviser helping with the forms simply need to ensure the adviser receives all they ask for, and that the forms make the deadline. The more information they have the more accurate the disclosure to the Revenue will be.
If you plan to make the disclosure yourself, and have not already done so, then read on and also check out the Revenue's pages at https://disclosures.hmrc.gov.uk/ oaics/.
The special forms require you to list all bank accounts held offshore at April 5, 2006. Furthermore they ask for all accounts relevant to the disclosure.
This may require you to list accounts which were closed before April 2006. Accounts are considered 'relevant' to the disclosure if there has been a loss of tax, ie, if you didn't declare the interest at the time and so did not pay the right tax back then.
Pulling together all the bank accounts can be quite time-consuming.
In some of the cases I am dealing with we have 20 to 30 different offshore accounts. Often this complexity arose more for the convenience of the banks than the customer. However, sometimes the customer kept switching accounts as they chased the best interest rates.
The interest on each account needs to be noted down or estimated so the tax at stake can be worked out. If the lodgements to the accounts were themselves undeclared income then the tax which should have been paid on them is also part of the disclosure.
A lot of people are worried that they simply have not got a complete set of bank statements or records to work from. This is by no means unusual. Furthermore some of the banks cannot even supply duplicate statements for more than a few years back. Other banks can go back to the 1980s, which is great.
The Revenue is fully aware that you may have difficulty providing exact numbers. It has stated clearly in its paperwork how it approaches this matter. It allows you to make your best estimate of the undeclared income.
Of course, it may come back to you and ask you to justify how you made that estimate.
In the case of our firm, because we are working with so many disclosures, we have built up a picture of typical offshore interest rates over the past 20 years (the Revenue is looking only as far back as 1987).
If you are doing your own forms there is good reason to do your forms in October rather than November. The interest you will have to pay on this late tax will be lower if you are paying in October.
The Revenue has a table of interest factors for each tax year. If you use the factor for, and pay in, October then you will save a few quid. Maybe quite a few.
This is not an area where you can wander into the tax office in mid-November and get help. If you cannot do these forms yourself then seek specialist help very soon indeed. The clock is ticking down to November 26.
Adrian Huston, a former tax inspector, is now a partner in Belfast tax and accountancy firm Huston & Co LLP (www.hustontax.com; phone 028 9080 6080).