Only 10,000 Freelancers Own Up in the Latest Tax Amnesty

Stephen Timms, financial secretary to the Treasury, stated that it was "morally unacceptable" to hide money offshore, and the taxman would bring forward measures over the next year to close down offshore tax evasion "for good".

He said that hiding money robbed public services of much needed funding and placed an wrongful burden on the majority of UK taxpayers who are honest.

Chris Oates, a tax partner at Ernst and Young believes that this will result in HMRC having to commit a lot more resources to investigating people who have not come forward. This is not welcome news for the government department at a time when they are looking to substantially reduce staffing numbers.

Dave Hartnett, HMRC's permanent tax secretary, said that HMRC is now beginning to use the information obtained from banks to identify individuals who have hidden money offshore and not made a disclosure.

The amnesty was introduced in July 2009 and people who came forward voluntarily now have to remit any unpaid tax, with interest, and a penalty fine of 10 per cent.

However, anyone who has not come forward will be investigated and much stricter penalties, such as a fine of 100 per cent on the outstanding tax, being "named and shamed" publicly and maybe even legal action.

IHMRC is expected to raise £500 million over a period of three years from individuals who have made a voluntary disclosure and much more from people who have not. The first tax amnesty in 2007 raised £450 million from 45,000 people but a further 17,000 people said they would pay up but then failed to do so.

It is thought that the taxman delayed the original deadline from November 30, 2009 because very few people had come forward. Over 10% of those who did come forward, did so on the deadline date of January 4.

Although fewer people came forward than in the last amnesty, HMRC said that the current scheme dealt with much more niche banks and a much smaller client base than in 2007.

However, it conceded that chasing up people who have not come forward would be both expensive and time consuming.

It added that people who have not yet disclosed their offshore accounts should still do so as they were likely to receive a lower penalty if they gave the information voluntarily.

People who have admitted to having untaxed funds in offshore accounts must now make a disclosure in full. This can be done by the last day of January on paper, or over the Internet by 12 March this year. They must declare how much money has been hidden offshore and then settle up.

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Image: 074/365 Hiding under the bed by stuartpilbrow