Do you have, or have you had any offshore income or assets?
If so you may be impacted by the new legislation brought in by HMRC known as the ‘Requirement to Correct’ rule. Anyone with undeclared offshore tax liabilities must disclose these to HMRC by 30 September 2018.
Beware of penalties
The HMRC penalties are most substantial if you fail to do this. HMRC penalties to date, range from 100% to 200% of the tax involved plus penalties, based on the value of any assets held or moved overseas.
Any undeclared monies or assets held offshore which have not been taxed should be reviewed immediately. The legislation also brings in a new HMRC approach to penalties, in that advice given by a professional adviser regarding offshore matters may be classed as ‘disqualified’. This means that you have no reasonable excuse for not declaring the tax on your offshore funds. So if you were advised to structure your offshore assets and funds in a certain way so that they were not taxable, but HMRC decide that they should be taxable, not only will you have to pay the tax but you will also have to pay the full penalty. HMRC will deem that any advice you have had regarding this was provided by an interested party and therefore disqualifies you from having a reasonable excuse as to why this income was not declared.
Review your assets
It’s important that any pre-existing professional advice regarding your offshore affairs is reviewed independently, to afford yourself the protection of having a reasonable excuse.
Post by Jane Alsop, Tax Investigations Adviser