Partner Article

An amnesty to end all amnesties?

We have commented previously about the potential for a future general “amnesty”.

his would mean that any taxpayer with tax irregularities might be given an opportunity to voluntarily come forward and settle with HMRC in the knowledge that he or she will suffer only “light touch” penalties and more importantly, not face the threat of criminal investigation or prosecution.

Over the past six years we have seen eighteen separate tax disclosure facilities, aimed at different sectors or at specific sources of income. Raising more than £750m in total from disclosures and follow up, some of these campaigns have been quite successful – and some less so.

Going forward, HMRC’s sophisticated “clever technology” CONNECT computer system will certainly improve the process of data collection and risk analysis and is thus likely to make this piecemeal approach more lucrative for the Chancellor.

But as the 2014 Budget approaches and next year’s election comes increasingly into sharp political focus, might this be a time for a more radical approach?

Past “amnesties” such as the offshore disclosure facilities have arguably been aimed at wealthy taxpayers and provided opportunities to wipe the slate clean. However little has been suggested for the less wealthy who know they have tax problems but are concerned about how and when to approach HMRC to put things right.

So how about general tax disclosure campaign available to all?

To be successful such a campaign would have to offer a simple way for errant taxpayers with minor tax issues to put matters straight, coupled with immunity from criminal prosecution and significantly mitigated financial penalties.

Of course, HMRC would have a fine line to walk – make the disclosure facility too attractive and those who have already come forward and owned up will cry foul.

A Budget announcement about a consultation on a potential general disclosure facility process would be a good start as, carefully structured, a “once and for all last chance” campaign could prove to be a winner for the Chancellor, both economically and politically.

This was posted in Bdaily's Members' News section by Baker Tilly .