RSS feedsA number of my clients want to come forward under the Revenue & Customs’ ‘amnesty’ but I am concerned that, as a preparer of previous tax returns, I might face liability myself. What should I do?
The key here is that in the past you will have relied on your clients to give you accurate and honest information and that, providing you have all your own paperwork in order, there should be no comeback or liability. But first, let’s look at the background.
In April Revenue & Customs announced details of an ‘offshore disclosure facility’ for people living in the UK who wished to come clean and confess to past tax irregularities. This followed the taxman’s success in obtaining access to the offshore bank accounts of customers of the main high street banks. The ODF will keep penalties at 10% of the unpaid tax, plus interest and the tax itself of course. There are two deadlines that need to be met: by 22 June 2007, taxpayers should have informed the Revenue of their intention to disclose offshore accounts and pay the full amount plus penalties. The next deadline will be 26 November 2007, by which time all the money will have to be handed over. As George Bull, Baker Tilly’s head of tax, says: ‘The ODF is an amnesty in all but name and it offers individuals and companies alike the opportunity to take advantage of a relatively benign penalty regime to get their tax affairs in order.’
The scheme also offers taxpayers with other irregularities, not necessarily relating to offshore accounts, to come forward as well. Full details of the scheme can be found at https://disclosures.hmrc.gov.uk/oaics/ .
So what of your liability as a preparer of past tax returns that, by your client’s admission, could have been incomplete? Andrew Watt, head of Chiltern’s amnesty, says: ‘A tax professional would be well advised to get a letter from the client authorising them to make the disclosure and the client must sign a certificate of disclosure. But we are going even further than that and have a legally settled disclaimer under which the taxpayer accepts full responsibility.’ In short, Watt believes it should be very straightforward to arrange the disclosure so that there is no comeback on the professional adviser.
He also says that if a tax adviser had a suspicion that the client was not disclosing everything required, then that adviser would be well advised to do some more checking, ‘for the client’s own good’. He adds that this is probably the one and only chance for taxpayers to clear up their tax affairs. Even if the client hasn’t received a letter from their bank advising them that the Revenue now had details of their offshore account, they would still be in a better position if they made an ‘unprompted’ disclosure.
