The Low Incomes Tax Reform Group (LITRG) has requested that HMRC keep open the recently publiscised disclosure of investment income facility for low income amounts for the whole of this tax year.
Earlier this week HMRC announced details of arrangements enabling investors with offshore accounts to disclose any income and gains not previously included in their tax returns (see link below). However, rather less publicity has been given to a parallel deal for anybody with something to confess to the tax authorities not connected to offshore accounts (the “onshore deal”).
The facility is open to those who hold or have held an offshore account, either directly or indirectly, that is in any way connected to a loss of UK tax and/or duty. Investors are being invited to come clean to HMRC in return for either a fixed penalty of 10%, or for no penalty at all if the income or gain that had been omitted was £2,500 or less.
John Andrews, Chairman of the Low Incomes Tax Reform Group (LITRG), says: “Many people on low incomes might wish to set the record straight with HMRC for small amounts that would attract no penalty, but they will effectively be denied the opportunity. We believe this is unfair and that HMRC should keep this offer open for low income amounts for the whole of this tax year.”
Whilst LITRG state that there is nothing inherently wrong with HMRC’s approach, the follwing points have been made:
- the requirement of an intention to disclose must be made within, what will be to many, an impossibly short timescale (by 22nd June 2007);
- there is very little support provided by HMRC to those who do not have professional tax advisers;
- an almost complete lack of publicity and detail is given of the onshore deal; and
- inadequate help is available for those with special needs, so putting them at a disadvantage.
John Andrews adds: “One final point to note is that this deal should not be taken up by those who have just made an innocent mistake.”
Related News
New arrangements for offshore disclosure agreements announced
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