HM Revenue & Customs' New Disclosure Opportunity (NDO) may bit have the desired effect because it does not offer individuals with UK-only tax irregularities the opportunity to declare.

PKF Accountants & business advisers is warning individuals who have not kept their UK tax affairs up to date not to rely on the NDO

Under the NDO, individuals, companies and trustees who have unreported income or gains from overseas assets can disclose them and pay their tax arrears plus interest and a 10% penalty. They must also disclose any unreported UK income or gains at the same time.

However, Simon Littlejohns, tax partner at PKF in Birmingham, explains that: "You have to have at least some unreported offshore income or gains to use this opportunity. Those who want to come clean on unreported income and gains that arose only in the UK cannot use the NDO. Such individuals must use the normal procedures and may face much higher penalty rates: 30% or above is not uncommon under the new penalty rules."

When HMRC last offered a tax amnesty in 2007, although it was called the 'Offshore disclosure facility' (ODF), a parallel UK-only facility was offered on the same terms, including the same 10% penalty rate, through local tax offices.

Simon Littlejohns said: "How can it be fair, or 'even handed' in HMRC's current jargon, to offer a low fixed penalty rate to some taxpayers but leave others to negotiate how much they will have to pay? What has changed since the parallel system under the ODF?

"Anyone who wants to come clean on past tax irregularities should not be deterred by missing out on the NDO. With expert help and depending on your personal circumstances, penalty rates much lower than 30% are possible - the key is to own up well before HMRC realises that there is something wrong, as many voluntary disclosures will still lead to a 10% penalty. And with HMRC on the search for cash, putting things right sooner rather than later is bound to save you money in the long run."