Taxpayers to get warning letters

By Julian Knight
Personal finance reporter, BBC News

HMRC has obtained details on offshore accounts

About 200,000 people are to receive a warning letter from HM Revenue & Customs over unpaid taxes on their offshore accounts, the BBC has learned.

The letter is the latest attempt to get people to take advantage of a partial amnesty being offered by HMRC.

People have until 22 June to tell HMRC if they owe tax or they could face big fines and even criminal prosecution.

To date, 8,180 people have taken advantage of the amnesty, only a small percentage of those who owe money.

Low response

An HMRC spokesman admitted that the response to date "could have been higher".

The letter is a last ditch attempt to get people to wake-up before it is too late Adrian Huston, Accountant

However, the Revenue denied that the letter was a panic measure and that it was poised to extend its deadline due to the poor level of response.

"This is one-off, unique opportunity for people to put their tax affairs straight," the HMRC spokesman said.

"After the 22 June then we will start to investigate... it may take weeks or months but we will ensure that people comply with the law," he added.

But according to Adrian Huston, a former Revenue inspector of taxes and an accountant, the number of people who have responded to the amnesty - which has been running since April - is "astoundingly low."

Mr Huston, whose business is based in Northern Ireland, contrasts the UK Revenue's amnesty to an earlier amnesty which operated in the Republic of Ireland.

"When Ireland did this, it brought in billions but the UK Revenue have just not publicised this amnesty enough.

READ THE LETTER HMRC offshore amnesty letter [1.5MB] Most computers will open this document automatically, but you may need Adobe Reader Download the reader here

"They need to be proactive to get people to come forward and this is the reason for the letter," Mr Huston said.

"The letter is a last ditch attempt to get people to wake-up before it is too late."

Fines

Ultimately, people not coming forward could count the cost.

Under the terms of the amnesty, people who own up to having had money in undeclared offshore savings will have to repay any tax and interest owed, along with a 10% fine.

Failure to declare will lead to a wider investigation being launched and the prospect of 100% fines and even criminal prosecution, HMRC said.

HMRC has details on about 400,000 accounts held with the offshore branches of major EU and UK banks.

They are only sending a letter to about 200,000 people whose address details they can be sure of.