No amnesty for stupidity

Browsing the financial press over the weekend, I can't believe the sympathy being expressed for the poor souls with undeclared offshore bank accounts who are about to get a demand from HMRC because they didn't take advantage of the latest tax amnesty.

It is suggested that it's a bit harsh if the first they know of the problem is when a letter from HMRC lands on the mat, and that the banks have a responsibility to forewarn their customers that they have passed confidential client details to the Revenue.

What are we saying here? That taxpayers with undeclared income should receive a warning from the payer of that income that they need to declare it on their tax return? Does that mean every time I pay a bill I need to add a covering letter reminding my supplier that the sale of said goods/services is taxable income and they need to put it on their tax return? Sounds like the nanny state gone mad! There appears to be no legal requirement for banks to inform customers that their details have been passed to the authorities. After all, they have been doing it for years with UK savings interest, as some of our clients will have discovered during a tax enquiry when it transpired that an account has been overlooked.

Get real, I say. If you're a UK taxpayer and have income that hasn't been taxed, you need to declare it. Everybody is meant to know that. You don't qualify for special treatment just because you don't know that. Ask my client, who has just had to settle a big tax bill after prematurely cashing in half of a loss-making investment bond while he was a 40% taxpayer. It's not tax on income or capital gain, it's just - well, it's just the rule, don't ask me to explain, but you're meant to know the rule, and since you didn't here's a big fat penalty plus interest too.

But the man in the pub said if I opened a savings account in xxx country I wouldn't need to declare it. Did you check his PI insurance before you acted on his advice? No, I didn't think so.