Offshore Disclosure Initiative Launch

HM Revenue & Customs (HMRC) has confirmed the details of a new disclosure initiative that will allow people with unpaid taxes linked to offshore accounts or assets to settle their tax liabilities at a favourable penalty rate.

Under the New Disclosure Opportunity (NDO) people who make a complete and accurate disclosure between 1 September 2009 and 12 March 2010 will qualify for a 10% penalty. Those who choose not to take this opportunity and are subsequently found to have undeclared tax liabilities are likely to face a 30% or higher penalty and also run an increased risk of criminal prosecution.

The Right Honourable Stephen Timms MP, Financial Secretary to the Treasury said:

“I would urge anyone with offshore accounts holding untaxed income or gains to take advantage of this simple and straightforward scheme.

“Most offshore investors already pay the tax that the law requires and it’s only fair that everyone respects the rules.

“Tax evasion is not a victimless crime. It deprives our public services of vital funding and places an unfair burden on the honest majority of taxpayers.”

Dave Hartnett, HMRC Permanent Secretary for Tax, said:

“I know there are people who regret not taking advantage of our Offshore Disclosure Facility (ODF) in 2007 which focused primarily on the customers of five large banks. Now everybody who has not paid the tax they should in relation to offshore accounts or assets has this New Disclosure Opportunity to pay what they owe with penalties on more favourable terms than normal.

“The procedure is simple and straightforward. Customers will be able to contact us on paper or through a dedicated area of our website.

“This will be the last opportunity of its kind.”

(HMRC) Tobacco, Alcohol and Oils teams to target smuggling across UK

A new national network to target tobacco and alcohol smuggling was launched today.

HM Revenue & Customs (HMRC) has set up seven teams of officers around the country, with five more to be set up over the next three months. They will target smugglers and disrupt and dismantle the supply and distribution chains for illicit tobacco and alcohol within the UK.

They will also target the market in illicit fuel, including closing down fuel laundering plants where acids and chemicals strip the Government marker from red diesel.

The teams will complement the work of the UK Border Agency (UKBA), which focuses on preventing illicit tobacco and alcohol entering the country.

Illicit tobacco smuggling means that up to £3bn in tax is lost every year that would otherwise be spent on essential public services such as hospitals and nurses, the police, or schools and teachers, while spirits fraud alone costs the Exchequer around £250m annually.

John McManus, HMRC Specialist Investigations Operational Director for Structured Fiscal Attacks, responsible for Inland Detection, said:

"The new teams will pursue businesses or people involved in selling illicit tobacco, alcohol and fuel. Since 2000 HMRC has broken up more than 370 criminal gangs and prosecuted more than 2,000 people.

"Tobacco, alcohol and fuel smuggling creates a cheap and unregulated supply operated by and for criminals. Organised crime undermines honest businesses whose trade is damaged when smugglers undercut them by evading tax."

A large proportion of illicit cigarettes are made in backstreet factories with little or no quality control and have been known to contain things such as sawdust, tobacco beetles and even rat droppings. Illicit alcohol containing poisonous methanol can be harmful and even lethal. Adulterated fuel can seriously damage engines and the waste products of illegal fuel laundering, often found dumped by roadsides or in fields, are toxic and a fire hazard.

The Government's strategy of pursuing those involved in illicit tobacco products has slashed the criminal market since 2001/02 from 21 per cent to 13 per cent.

The new nationwide network will fight the supply of illicit tobacco and alcohol both in the formal retail sector and by wholly unlawful channels.

Those who are caught trading in illicit products will face a wider range of penalties and sanctions and a maximum seven years in prison, as well as confiscation of their stock.

Anyone with information about smuggled tobacco, alcohol or fuel should contact the secure hotline webpage at http://www.hmrc.gov.uk/customs-hotline, call 0800 595000 or email customs.hotline@hmrc.gsi.gov.uk.