By Julian Knight
Personal finance reporter, BBC News
The HMRC may be 'disappointed' by response to the amnesty
It was supposed to have been a bonanza for the government.
HM Revenue & Customs (HMRC) had offered some 400,000 people holding money in offshore bank accounts the chance to own up to the tax they owe.
But to date, the bid seems to have fallen flat.
Three days before a 22 June deadline, just 25,000 people have come forward to take advantage of the partial amnesty offered by HMRC on offshore accounts.
So despite a rush over the weekend, less than 7% of those who could to take advantage of the amnesty have done so.
That means the Treasury could be missing out on hundreds of millions - if not billions - of pounds in tax.
And offshore account holders could be putting themselves at risk of severe penalties.
"It is quite amazing how few people have come forward," Adrian Huston, a former inspector of taxes and an accountant, told BBC News.
"The HMRC has these peoples' names and account numbers. They have been warned by their bank and the HMRC."
In the public eye
Now, Mr Huston reckons the HMRC is going to get tough.
"The HMRC is going to be disappointed in this response.
"We will see a lot of tax investigations, hundreds of thousands possibly. The HMRC may have to take on more staff to cope with the workload."
High-profile people - celebrities, for instance - who have money offshore may be amongst the first to feel their collar felt by the taxman, Mr Huston believes.
"Usually, the vast majority of cases are settled without prosecution but the HMRC will want to put a message out there," he says.
But an HMRC spokesman denied that they would be targeting people in the public eye.
"Each case will be judged on its merits," he insisted.
According to Mike Warburton, senior tax partner at accountancy firm Grant Thornton, the poor response to the amnesty could damage HMRC's effectiveness.
"The HMRC are going to have to go through with this," he says.
"It will bung up the tax system for years to come. Ultimately, this will detract from the service the HMRC gives the public."
In public, HMRC has been putting a brave face on things.
Officials have talked about being poised for a last minute rush; as happens each year with the self-assessment tax deadline.
But generally speaking, all but a small minority get their self-assessment forms in well before deadline.
Last week, the BBC revealed that HMRC had taken the drastic step of writing to half the people who they know have offshore accounts to remind them of the amnesty - and of the penalties if they do not take advantage.
"This is quite late in the day," Mr Warburton says.
"The HMRC has not publicised this amnesty. Instead they have been relying on banks and accountants to do their job for them."
Other EU countries have tried a similar offshore account amnesty, often with more success.
In 1994, Ireland offered an amnesty which brought in hundreds of millions of pounds and brought thousands of people who had previously been tax evaders back under the eye of the national tax authorities.
As a Northern Ireland-based accountant, Mr Huston had had a ringside seat for the Irish amnesty and contrasts the approach of the Irish and UK tax authorities.
"People were guaranteed that if they paid their back taxes - plus a 100% (penalty) - they would face no further investigation or prosecution," Mr Huston says.
"In the UK, HMRC are giving no such guarantee so people could come forward, pay their tax and still face prosecution... the deal is not that generous."
However, an HMRC spokesman told the BBC that those who did come forward and "put their cards on the table" were less likely to face prosecution than someone who did not take advantage of the partial amnesty.
In 2004, Germany offered a partial amnesty to people who had money in offshore accounts, bringing in 378m euros ($507m; £255m) - more than the UK amnesty is thought likely to gather in.
Again, the terms of the German amnesty were much more generous than those of the HMRC's campaign: in this case, the chance to clear one's name by paying tax on just 60% of the assets held offshore.
Admittedly, the UK amnesty is charging a lower penalty than the Irish one - the fine is only 10% on top of the back tax.
But HMRC is also levying interest on the tax bill.
That could mean a nasty shock for some taxpayers taking advantage of the partial amnesty, as HMRC's own calculations make clear.
Someone coming forward to admit to owing £1,000 of tax from the 1991/1992 tax year, HMRC estimates, would have to pay not only that - but also £1,030 in interest and a 10% fine on top.
In total, therefore, the £1,000 tax liability would swell to £2,130 - and that is for those taking advantage of the amnesty.
Fortunately, owning up to HMRC is - from an administrative viewpoint, at least - hassle-free.
People who have had money in offshore accounts simply have to click on a link on HMRC's website, and simply state that they may have tax to owe.
They do not even have to know how much tax they owe. Anyone registering for the amnesty has until 26 November to calculate what they owe and make payment.
"Name and number"
Those who do not respond face significant penalties.
For these people, "fines will range from 30% of tax owed to 100%," HMRC's spokesman says.
"Also, the chances of prosecution are greater."
Despite the dire warnings of what lies in wait for those ignoring the amnesty, it seems thousands of people are thinking that somehow they will get lost in the crowd.
However, people are unlikely to get away with it.
"The HMRC has everyone's name and number and the question for people in the last few days before the end of the amnesty is whether they wait for a knock on the door," Mr Huston says.
And ominously, HMRC is pledging to not let anyone slip through the net.
"It has been slow getting the message across - but we will work though all the cases, whether it takes months or years," HMRC spokesman says.
The 22 June deadline for disclosure, it insists, is genuinely a final one.