The disclosure facility, which will run until September 2018, offers those who have not yet reported any tax irregularities arising from offshore income and gains an opportunity to do so.

Pinsent Masons says that the measure is a final opportunity to set affairs in order before tougher penalties come into force in 2018, and ahead of the implementation of the Common Reporting Standard (CSR), which will see cross-border exchange of information on taxpayers increase dramatically.

The first reporting period for CSR is 31 December 2016 and information has to be reported by financial institutions to HMRC in respect of the first reporting period on or before 31 May 2017.

HMRC will be able to exchange information with partner jurisdictions on or before 30 September 2017.

The introduction of CSR will overhaul the level of transparency over tax compliance with global tax authorities able to share information on taxpayers for the first time.

As part of the government’s clampdown on tax avoidance and tax evasion, the new disclosure facility offers no ‘special terms’. Those using it will have to pay the outstanding tax in full, plus interest charged daily from the original due date. They may also have to pay a penalty calculated as a percentage of any additional amount owed, and could still face criminal prosecution.

Fiona Fernie, partner and head of tax investigations at Pinsent Masons said: ‘The Revenue is continuing to come down hard on those underpaying tax on offshore income and gains.

‘Tougher sanctions coming in over the next few years point to a zero-tolerance approach and those with any irregularities should think seriously about setting their affairs in order.

‘However, it should be noted that the new Worldwide Disclosure Facility may not go far enough to encourage many to come forward. Those using it continue to face the risk of hefty penalties, and even criminal prosecution. It is possible that many will look at the terms and opt to do nothing- in the hope that any irregularities are not picked up by HMRC.

‘Offering more appealing settlement terms, thereby enticing greater numbers to come forward, may be more effective, and could save the Revenue huge time and resource in the long term.

‘Either way, anyone who is concerned that they may have underpaid tax should seek professional guidance as soon as possible. It should be remembered that once the CSR is implemented, the Revenue will have unprecedented access to information on taxpayers’ overseas wealth and activity.’

'Offshore issues' covered under the Worldwide Disclosure Facility include unpaid or omitted tax relating to income arising from an offshore source, assets held outside the UK and activities carried out ‘wholly or mainly’ in another territory.

The facility also covers transfers of funds connected to unpaid or omitted UK tax to another territory.

Once HMRC has been notified about an intention to make a disclosure, there will be a 90-day limit to collate the information to complete the disclosure, calculate the final liabilities including tax, duty, interest and penalties, and complete the disclosure, using the unique disclosure reference number provided when notifying HMRC.

The HMRC guidance on the Worldwide Disclosure Facility is available here