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Where Taxpayers and Advisers Meet

2007 Offshore disclosure facility

taxed
Posts: 22
Joined: Wed Aug 06, 2008 3:53 pm

2007 Offshore disclosure facility

Postby taxed » Tue Nov 04, 2008 2:32 pm

We have a case of a client who participated in the offshore disclosure facility last year and paid over tax in November 2007 on a receipt from an offshore bond.
She then received a letter in April 2008 stating:

"On behalf of Commissioners for HMRC I accept the payment submitted pursuant to your offer submitted under the disclosure reference number stated above.

This concludes the review of your discloure"

After that, she received a letter in July 2008 from her normal tax office stating 'we believe you had a receipt from a bond, can we have details etc".

We wrote pointing out the bond had alreadty been disclosed and gave the officer the offshore disclosure reference.

Having confirmed that a disclosure was made, the officer is still pursuing the matter by asking for a copy of the policy document.

I believe the terms of the offshore disclosure were that if HMRC did not query the disclosure by April 2008, the taxpayer could assume finality.

Also, the usual practice of making an 'offer' and having HMRC accept should also offer finality.

Any comments on the situation would be appreciated, and any link to the original HMRC statement regarding the April 2008 finality would be very useful (HMRC website seems to have taken everything down).

JSK TAXATION
Posts: 200
Joined: Wed Aug 06, 2008 2:18 pm

Re: 2007 Offshore disclosure facility

Postby JSK TAXATION » Tue Nov 04, 2008 3:42 pm

Taxed,

Certainly the profession was led to believe that there was certainty following an acceptance of a disclosure. In fact I remember discussing at some length whether in a situation where a client had overstated tax lost, they would have the right to go back and revisit the position and reclaim the overpayment. Indeed the answer was no and therefore clients were carefully advised to consider the offer they were making as there were limited circumstances in which they could remedy the situation were it to be wrong.

For all intents and purposes therefore, one feels that this is a little odd! Two points I therefore put to you:

Where HMRC obtain information that leads them to believe the disclosure was incorrect, then I guess even though there was a contract settlement, they would have the power to revisit. However, I would have thought this could only be done by the issue of a discovery assessment,

If the officer is not conducting an enquiry into a later tax year i.e. 2005/06 or 2006/07 etc, i.e. no s9A Notice has been issued, then one wonders whether he is acting within his statutory remit or whether he is just on a fishing expedition?

Kind regards
John S King
Chartered Tax Adviser
e: help@taxation-advice.com
w: http://www.taxation-advice.com
01732 897850

taxed
Posts: 22
Joined: Wed Aug 06, 2008 3:53 pm

Re: 2007 Offshore disclosure facility

Postby taxed » Tue Nov 04, 2008 4:15 pm

JSK,

Thanks for that.

HMRC may well have a copy of the chargeable gain certificate, but the disclosure itself was correct, and the only issue could be whether the tax calculation (involving top slicing relief) was correct.
However, their letter in April confirmed they accepted the payment - what else could 'accepted' mean apart from that was the end of the matter?

JSK TAXATION
Posts: 200
Joined: Wed Aug 06, 2008 2:18 pm

Re: 2007 Offshore disclosure facility

Postby JSK TAXATION » Tue Nov 04, 2008 4:27 pm

taxed,

I agree. I would put this to them and if they still insist, ask them for the part of the Act they are currently working under?

All the best....
John S King
Chartered Tax Adviser
e: help@taxation-advice.com
w: http://www.taxation-advice.com
01732 897850


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