BBC News
watch One-Minute World News
Last Updated: Thursday, 6 December 2007, 12:11 GMT
Offshore tax campaign falls short
HMRC office
Hundreds of thousands of people faced a tax crackdown
HM Revenue and Customs (HMRC) raised 400m through its campaign to tax money held abroad, far below expectations.

About 45,000 offshore customers paid up before the 26 November deadline, well below the 64,000 who registered a potential liability in June.

Some estimates had suggested the Offshore Disclosure Facility (ODF) could raise as much as 1.75bn.

HMRC denied it was disappointed by the amount collected, and said it expected the total to grow.

Partial amnesty

Customers who paid by 26 November benefited from a partial amnesty, which capped any penalty at 10% of the unpaid tax.

HMRC can usually impose fines of between 30% and 100% of the tax due.

The ODF is a key element of HMRC's strategy to ensure putting monies offshore does not provide an unfair advantage
HMRC Spokesman

But the outstanding tax and any interest still had to be paid in full.

The largest single payment under the scheme was 3m and the average was 9,000.

HMRC said it was "very pleased" with the results of the ODF, which it argued captured money that would not otherwise have been properly taxed.

"It is a low cost, high yield project," said a spokesman.

"The ODF is a key element of HMRC's strategy to ensure putting monies offshore does not provide an unfair advantage over those who pay their fair share," she added.

HMRC has given more than 300 people with particularly large or complex affairs extra time to pay and expects their contributions to boost the final tally significantly.

There's probably a good number who haven't owned up, and one suspects they'll probably have another dig and see what else they can find
John Whiting, PwC
In addition, the spokesman said officials would be checking the details of people who registered a potential liability earlier in the year but did not subsequently make a payment.

Anyone who is found to owe tax is unlikely to be offered the same terms.

The original campaign targeted about 200,000 customers of the main high street banks, who were forced to hand over private account details to HMRC.

Second phase

Accountants have said they are not surprised that the numbers involved and the amount raised were less than had been predicted.

"The expectations at one stage were that there would be more people and more money, but in all honesty, nobody really knew how many people were out there," said John Whiting, senior tax partner at PricewaterhouseCoopers.

"A lot of people were paying the tax anyway, or were not liable to pay tax because they are non-domiciled so they weren't really certain who was trying to conceal," he added.

But given the "reasonable" success of the scheme, he expects the Revenue to repeat the exercise.

"There's probably a good number who haven't owned up, and one suspects they'll probably have another dig and see what else they can find."

HMRC has already said it is considering launching a second campaign in the new year.

This could target those who have failed to pay tax on money in offshore accounts run by about 150 other financial institutions such as building societies, stockbrokers and investment management firms.

In the meantime it urged anyone who has still not come forward to do so.

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific