Welcome to the August 2009 Newsletter from Connolly Accountants Ltd

As the Revenue prepares to embark on its second tax amnesty, more than 300 banks and financial institutions have been instructed to expose details of customers' offshore account activity.

Thousands of people with undeclared assets in accounts abroad are expected to be contacted as part of the Government's National Disclosure Opportunity, which will commence on 1 September.

Meanwhile, figures released this month reveal that more than 175,000 new cars have been purchased following the Government’s Vehicle Scrappage scheme initiative. The popularity of the scheme means that Government funding is likely to be exhausted well in advance of the original February deadline.


Banks ordered to disclose offshore account details

Over 300 banks and financial institutions have been ordered to pass the details of those customers who hold offshore accounts to HM Revenue & Customs (HMRC).

The legal ruling means that HMRC can now issue compulsory disclosure notices to the banks, ahead of the National Disclosure Opportunity (NDO). Banks will be required to reveal details of customers' payments and transfers to overseas accounts. Tax inspectors will then cross-reference this information with that supplied voluntarily by individuals to check that the correct amount of tax is paid.

Dave Hartnett, HMRC's Permanent Secretary for Tax, said: 'I know there are people who regret not taking advantage of our Offshore Disclosure Facility in 2007.'

'I urge any of them who have unpaid tax liabilities connected to [offshore] accounts now or in the past to come forward and make a full disclosure during the NDO.'

The NDO offers people with unpaid taxes linked to offshore accounts or assets a final opportunity to make a complete disclosure, at favourable penalty rates.

To use the scheme, a notification of the intention to disclose must be made to HMRC between 1 September and 30 November 2009. Those taxpayers notifying on paper can do so from 1 September to 30 November, while those notifying electronically can do so from 1 October to 30 November.

Disclosures can then be made from September 2009 to January 2010 on paper, or from October 2009 to 12 March 2010 electronically.

Once the NDO ends on 12 March, those taxpayers who have failed to come forward will be 'vigorously pursued' by HMRC and will face penalties of between 30% and 100%, together with an increased risk of prosecution.

For more information on the New Disclosure Opportunity, visit the Hot Topics area of our website.


Scrappage hailed 'a success' as scheme reaches half-way mark

The Government's Vehicle Scrappage scheme was hailed a success as the number of cars purchased under the initiative surpassed the half-way mark this month.

Official figures have revealed that over 175,000 new cars have been ordered since the announcement of the scheme in the 2009 Budget. This means that more than half of the funding ring-fenced for the scheme has now been exhausted.

The Government put aside £300 million for the scheme, enough to fund 300,000 transactions. However, the Society of Motor Manufacturers and Traders predicts that funding will run out well in advance of the original closing date of 28 February 2010, and possibly by 'the end of October, early November'. Individuals and businesses wishing to take advantage of the scheme have therefore been advised to act quickly.

Following the news, Business Secretary Lord Mandelson said the scheme was 'a great deal for manufacturers and dealers, not to mention customers'.

Its popularity has led to a 13.5% rise in car manufacturing, Mandelson confirmed, with the South-East of England seeing the highest take-up (18% of total scrappage sales).

The so-called 'cash for bangers' initiative offers a £1,000 subsidy, per vehicle, from the Department for Business, Innovation and Skills, matched by a further £1,000 subsidy from the manufacturer. The subsidy is in addition to any other subsidy or discount offered by the manufacturer or dealer.

The old and new vehicles are subject to a number of conditions, including restrictions relating to their weight, date of UK registration, registered keeper, and length of ownership. A full list of conditions is available from the BIS (visit www.berr.gov.uk.)


ESSENTIAL TAX DATES AND DEADLINES

31 August: Annual adjustment for VAT partial exemption calculations (May VAT year end).

30 September: End of CT61 quarterly period.

For more information on key tax dates and deadlines, visit our 2009/10 Tax Calendar.


QUOTE OF THE MONTH

'Interest is not a penalty but compensation for tax paid late.'
A spokesperson for HMRC, commenting on the announcement that the interest charged on late payments of inheritance tax is to rise.


WEBSITE OF THE MONTH

www.supply2.gov.uk
Browse thousands of public sector procurement opportunities.


ON OUR WEBSITE

Making the most of your finances

For information and tips designed to help you make the most of your finances, visit the Your Money section of our website.

A wealth of business planning advice

Meanwhile, for advice on all aspects of business planning, from starting a new venture to managing staff, visit the Your Business section.

Late payment fee for inheritance tax 'to rise to 3%'
The level of interest chargeable on late payments of inheritance tax is set to rise from 0% to 3% next month.
Click here for the full story

VAT should be 'scrapped on green appliances'
VAT should be scrapped on energy-efficient household appliances, the British Retail Consortium has said.
Click here for the full story

Small firms gain 'free access' to Government contracts
Small businesses throughout the UK have been granted free access to Government contracts worth up to £100,000.
Click here for the full story

Watchdog calls for greater protection for shoppers
Shoppers who pay for goods in advance should receive greater protection if the business subsequently folds, according to the watchdog Consumer Focus.
Click here for the full story

Business groups condemn workplace parking tax
Government plans to impose a tax on firms that provide staff car parking have been criticised by business groups.
Click here for the full story