Offshore assets haul may net minnows rather than sharks

THE Revenue Commissioner’s offshore assets letter arrived in the post recently and the only thing missing was the soundtrack from the movie Jaws. Most brown envelopes with a harp on them make me go into an irrational panic. It’s a bit like when security personnel at the airport ask me if I’ve packed my bag myself.

I have. But, having watched too many documentaries about innocent (and not so innocent) drug mules, I am always struck by a momentary terror that heroin with a street value of €8m has been placed in my luggage when I’m looking at the departures board.

The offshore assets letter the Revenue sent to 500,000 taxpayers, is — if the menacing and, frankly, entirely confusing text is anything to go by — designed to scare the living hell out of us.

And in fairness to the scare masters-inchief at Dublin Castle, the Revenue have achieved that desired effect in bucket loads. Accountants and advisers, financial journalists too, have been inundated with calls from stressed taxpayers bewildered by the missive, which followed an announcement on Budget Day last October by Finance Minister Michael Noonan, pictured.

Noonan announced that the Government, with the mutual assistance of overseas tax agencies, was going to target offshore income and assets that have not been declared.

The deadline for confessions or “necessary corrections” as the Revenue calls them, is May 1. And there is a real benefit in fessing up, including reduced penalties, not having your name published in the tax defaulters list and avoiding prosecution.

The real and necessary target is large-scale tax evaders. But the sweep could also affect ordinary decent taxpayers who may or may not have bank accounts, pensions and other undeclared offshore assets. The problem with the Revenue’s “qualifying disclosure” letter is that it fails to spell out in plain English the nature and impact of the “significant changes” relating to “a person’s offshore matters or matters”. “These changes restrict a person’s opportunity to make a ‘qualifying disclosure’”, says the letter, before adding “if this affects you, there are full details on our website”. That’s fine for high-net-worth individuals (HNWI’s) who rarely make an appearance on the Revenue’s quarterly tax defaulters list, with a coterie of advisors to manage their tax exposures. But the opaque language and instructions are unfair to more vulnerable cohorts of taxpayers, such as the elderly or those with limited financial literacy. That said, it is pensioners, especially those who worked in the UK in their salad days, who may need to clarify if they will be caught by the new offshore assets net. Almost 135,000 Irish residents were in receipt of British state pensions as of last August. And although many of them will fall outside of the annual income tax threshold, they may also be renting properties overseas and failing to declare income, intentionally or not. My guess is that despite all the publicity surrounding exposés such as Lux Leaks and Panama Leaks and another incarnation known as Swiss Leaks, it’s not politicians and businessmen who have most to fear. I suspect the vast bulk of monies recovered from the Revenue’s latest offshore haul will come from the masses of terrified pensioners who will answer Ireland’s call.