Over the years there have been a number of tax amnesties, encouraging taxpayers to come forward to correct their tax affairs, declare their income and pay any tax due. These amnesties have come alongside greater information sharing between EU and international tax authorities, as well as greatly increased penalty powers for HMRC.
The “Requirement to Correct” regime is being labelled as the final opportunity for individuals with offshore income to disclose them to HMRC. This final deadline is 30th September 2018.
This date is relevant because it significant the date when more than 100 countries will exchange data on financial accounts under the so called Common Reporting Standard.
After this date, the new penalty is likely to a minimum of 100% of the tax that is due (increasing from approximately 30% on average currently).There is therefore a very significant incentive to come forward prior to the deadline.
There are specific rules as to who can use the scheme to come forward. However even if you don’t meet the rules for this scheme, coming forward sooner rather than later is always advantageous. There is a common misconception that offshore income does not need to be reported in the UK, nor any tax paid. The circumstances where this is the case is now more restricted than ever. All individuals are advised to carefully consider their position now – if they have offshore assets where tax has not been paid, it may be best to take professional advice to ensure that their tax affairs are up to date.
We have seen the number of enquiries opened by HMRC increase significantly in recent months, especially relating to UK and offshore property income. These investigations are triggered by the greater availability of information and HMRC’s investment in software to compare various governmental and non-governmental databases.
The key steps to take now are:
1. Contact a professional tax adviser immediately to take advice. 2. Begin to collate the relevant information and what was not declared. 3. Prepare a list of all assets and income sources – this is likely to be very useful in discussions with your adviser.
Wisteria are supporting a large number of new clients to deal with HMRC tax enquiries, helping them to clear up their tax affairs and minimise any penalties becoming due as a result of non-compliance. For more information on Wisteria’s tax investigation services, please contact us for a confidential discussion.