ODF – follow up

HM Revenue & Customs have now published the details of their strategy in follow up to the 2007 Offshore Disclosure Facility.

Based on information in their possession, obtained using s.20 notices served on the banks or via the European Savings Directive, the Revenue will be contacting those individuals which it believes have unreported savings income from abroad. Included will also be those individuals who notified an intention to disclose liabilities under the ODF, but who did not, in the event, make a disclosure.

The method of contact will take various forms; being typically a letter and questionnaire, or a formal notice of enquiry into an individual's tax return. In exceptional circumstances, people may be arrested where the Revenue consider there is a case for criminal prosecution.

The indications are that the Revenue will, in addition to tax and interest, be pursuing penalties on a normal basis, with the maximum penalty of 100% of the tax being subject to mitigation on the usual basis. There will be no enticement of a reduced or fixed penalty, as was displayed with the ODF, and this must, of course, be the correct policy.

With the take-up of the ODF in 2007 being poor compared with expectations, we suspect that this latest offensive by the Revenue's will one of many over the months ahead as the Revenue seek to follow up on the vast quantities of information now at their disposal.