UK RESIDENTS with undisclosed interest in Guernsey bank accounts have been offered a chance to come clean. HM Revenue and Customs last week announced an offshore disclosure facility for those who hold or have held, either directly or indirectly, an offshore account connected with an undisclosed tax liability.

As part of the amnesty, those coming forward will be subject to a maximum penalty of 10 per cent of the outstanding tax, a concession compared with the typical fine of up to 30 per cent.

Those who fail to comply are likely to fall under intense scrutiny from HMRC.

The announcement follows increasing speculation that High Street banks will tell their customers that they have been forced to disclose details of offshore accounts.

KPMG Channel Islands chairman Jonathan Hooley said anyone with irregularities in his or her tax affairs should seriously consider taking advantage of this opportunity.

The deadline to register an intention to make a submission is Friday 22 June.

‘Those who ignore this will at best expose themselves to a robust and intrusive investigation with a substantially higher penalty and at worst the risk of a prosecution.’

Mr Hooley said the clampdown had long been expected.

‘It is a response by HMRC to deal with the mountain of information it has received about the holders of offshore bank accounts and structures from some of the clearing banks and from exchange of information with overseas tax authorities under the European Union Savings Directive in a quick and cost-efficient way,’ he said.

‘What they are saying is, ﾓWe will be able to find a lot of information about you so you better come clean and make the most of the reduced penalty that will applyﾔ.’

Furthermore, other irregularities, which do not relate to offshore issues can be disclosed to any office of HMRC under the same terms as the offshore disclosure facility.

Mr Hooley said the UK tax treatment of offshore bank accounts and structures could be a complex area.

The following types of people should consider taking professional advice as soon as possible:

n Anyone who receives a letter from a bank indicating that information concerning his or her offshore accounts has been, or will be, passed to HMRC.

n Non-resident trustees and directors of offshore companies who have, or are concerned that they may have, any other form of undisclosed tax liability.

n Anyone with offshore interests who believes his or her affairs are in order but would like reassurance.

He said the forms were relatively simple, requiring limited information compared to that expected in a normal voluntary disclosure, but some people would find it very hard to meet the deadline. Under the facility, irregularities going back a maximum of 19 years from any given tax year can be disclosed.

‘Those with complex issues extending over a long period of time will undoubtedly struggle to assemble the data required to make the disclosure in time.’

* KPMG has set up a national helpline to assist anyone wishing further information regarding the disclosure facility – Freephone 0800 970 9690.