HMRC is warning that taxpayers could face penalties if they
fail to declare their income on foreign assets before new ‘Requirement to
Correct’ legislation comes into force.
HMRC is urging UK taxpayers to come forward and declare any
foreign income or profits on offshore assets before 30 September to avoid
higher tax penalties.
New legislation called ‘Requirement to Correct’ requires UK taxpayers to notify
HMRC about any offshore tax liabilities relating to UK income tax, capital
gains tax, or inheritance tax. The most common reasons for declaring offshore
tax are in relation to foreign property, investment income and moving money
into the UK from abroad. HMRC has stated that over 17,000 people have already been
in contact to notify they have tax due from sources of foreign income, such as
their holiday homes and overseas properties.
The Financial Secretary to the Treasury, Mel Stride MP,
said:
‘Since 2010 we have secured over £2.8bn
for our vital public services by tackling offshore tax evaders, and we will
continue to relentlessly crack down on those not playing by the rules.’
‘This new measure will place higher
penalties on those who do not contact HMRC and ensure their offshore tax
liabilities are correct. I urge anyone affected to get in touch with HMRC now.’
Common Reporting Standard (CRS)
From 1 October more than 100 countries, including the UK,
will be able to exchange data on financial accounts under the CRS. It is
expected that the CRS data will significantly enhance HMRC’s ability to detect
offshore non-compliance and it is in taxpayers’ interests to correct any
non-compliance before that data is received.
Taxpayers can correct their tax liabilities by:
- Using HMRC’s digital disclosure service as
part of the Worldwide Disclosure Facility or any other service provided by HMRC
as a means of correcting tax non-compliance.
- Telling an officer of HMRC in the course of
an enquiry into your affairs.
- Or any other method agreed with HMRC.
Once a taxpayer has notified HMRC of their intention to make
a declaration, by the deadline of 30 September, they will then have 90 days to
make the full disclosure and pay any tax owed. To ensure there is an incentive
for taxpayers to correct any offshore tax non-compliance on or before 30
September 2018 there are increased penalties for any failures to correct by
that date.
