HM Revenue & Customs (HMRC) is sending letters to some taxpayers who may have offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax. The letters are final warnings from HMRC urging them to declare any “overseas income or gains” by the end of September to avoid paying higher tax penalties.
HMRC has sent warning letters to warning letters urging those with “overseas income or gains, including investments and accounts” to declare them by the end of September to avoid paying higher tax penalties.
A new legislation called the Requirement to Correct (RTC) requires taxpayers to correct any offshore tax non-compliance on or before 30 September 2018. This will allow HMRC to take the appropriate action, for example, the collection of tax, interest and any penalties due under the appropriate legislation currently in force. This will ensure that those with offshore interests pay the correct amount of tax.
Failure to disclose the relevant information to HMRC on or before 30 September 2018 will result in the person becoming liable to a new penalty as a result of their failure to correct (FTC). The new FTC penalty is likely to be much higher than the existing penalties, with a minimum penalty of 100 per cent of the tax involved. Fines could even reach 200 per cent if taxpayers fail to provide the correct information.
To avoid becoming liable to these new higher penalties, a person must correct their position as soon as possible before the end of the month. If they do this, the tax and interest will be collected and the existing penalty rules will apply.
At Beavis Morgan, our diverse team of tax professionals are committed to ensuring that your tax reporting obligations are fully satisfied and that every opportunity to lawfully exploit tax savings is made known to you, restructuring your affairs in a tax effective and efficient way.
If you are unsure whether they have undeclared UK tax liabilities that involve offshore matters or transfers, get in touch with us today. Our tax specialists will review your affairs and, if necessary, rectify any discrepancies before you become liable to the new FTC penalties that will come into force on 1 October 2018.
For more information, and to make sure you don’t pay more tax than you legally need to, contact your usual Beavis Morgan Partner.