A scheme designed to encourage British tax evaders to come clean before tougher rules kick in is destined to fail.
The online worldwide disclosure facility was launched by Revenue and Customs at the beginning of the week. It has been billed as the last-chance saloon for British tax evaders to put their affairs in order before a beefed up sanctions regime comes into effect next month.
However, lawyers said yesterday that the scheme “may not be attractive enough to incentivise large numbers to come forward”. The problem, say tax law experts, is that the facility offers no special terms – those using it will have to pay the outstanding tax in full, plus interest charged daily from the original due date.
In addition, they may have to pay a penalty calculated as a percentage of any additional amount owed, and could still face criminal prosecution.
Kevin Kinsella Jnr, head of tax investigations at KinsellaTax 2014 Ltd with offices in Chelsea and Wilmslow, said those using the facility would “continue to face the risk of hefty penalties, and even criminal prosecution. It is possible that many will look at the terms and opt to do nothing in the hope that any irregularities are not picked up by HMRC.
“Offering more appealing settlement terms, thereby enticing greater numbers to come forward, may be more effective, and could save the Revenue huge time and resource in the long term.”