Requirement to Correct - ACT NOW

Blog Posts

Simpson Wood | 20th August

Requirement to Correct - ACT NOW

30 September 2018 – a vitally important date for all those who have previously undisclosed offshore income and gains. This is the date by which a full disclosure of any such income and gains, and settlement of any tax liabilities ongoing needs to be made to HMRC.

So, why is this so important? – Because a number of new laws become effective from that date, not least of all the potential for penalties to double from 100 to 200% of the potential lost revenue where HMRC subsequently discover undisclosed income and gains, plus a potential further 10% of the value of the overseas assets held. In addition, HMRC no longer has to prove there was an intention to defraud the exchequer when sending cases for criminal prosecution. 

How will HMRC know about previously undisclosed assets? – From October 2017, the UK was an early adopter of the Common Reporting Standard between the UK and 90 other countries. This is essentially a financial information exchange mechanism so the chances are HMRC may already know about some assets. From 1 October 2018, approximately 127 countries will be exchanging information with the UK. It is expected that this information will feed into HMRC’s Connect system to be compared with entries on tax returns. 

To summarise, the world is a smaller place from 1st October this year and the UK tax system has essentially declared war on all those who have failed to take advantage of previous offshore disclosure opportunities.  This is the last chance to do so before HMRC effectively has the right to impose the most punitive civil penalty regime in the country’s modern history. 

 

Please contact us as a matter of urgency if this applies to you.