Everfair Tax : Surrey (Weybridge) Office

Suite 6, The Monument Building, 45-47 Monument Hill, Weybridge, Surrey, KT13 8RN  
Tel:  01932 320 800
 

Email: info@everfairtax.co.uk

All rights reserved | Privacy Policy | Use of Cookies

  • Facebook Social Icon
  • Twitter Social Icon

Website by www.CobsWebs .com 

HMRC collects £560 million in one year from offshore tax avoidance

July 29, 2019

HMRC collects £560 million in one year from targeting those with undeclared offshore tax liabilities, HMRC’s much talked about powers under the Requirement to Collect rules with the increased possibility of criminal prosecution came into effect on 30 September 2018, with those individuals with unpaid offshore tax coming under investigation.

 

The results are already positive from the historic focus on tax compliance with respect to offshore assets, and HMRC’s Offshore, Corporate and Wealthy unit have collected £560 million from 827 British taxpayers in the last year. This is a significant increase from the 2016/17 tax year where only £325 million was recovered.

 

30 September 2018 was also the closing date for more than 100 countries to exchange data on financial accounts under the Common Reporting Standard (CRS).  In a written statement to the House of Lords, the UK’s agreements with Crown Dependencies and Overseas Territories have been described as ‘extremely useful’. Having now received the data, HMRC are actively looking for any late under-declared or undisclosed tax liabilities, and if found a ‘Failure to Correct’ (FTC) penalty is being issued.

 

Aimed specifically at deliberate offshore tax evasion and the attempts to conceal such evasion from HMRC, the standard penalty rate has been set at 200%, with some scope to reduce it to a minimum of 100% of the tax due, depending on the severity of individual circumstances.  However, the FTC penalty applies to all tax omissions that occur before the 6 April 2017; with Income Tax, Capital Gains Tax and Inheritance Tax that encompass offshore matters, all targets for scrutiny.

 

HMRC can also apply additional sanctions on a case-by-case basis. An Asset Based Penalty is issued for an additional 10% of the asset value, when the tax owed exceeds £25,000; and where assets have been deliberately moved to avoid tax obligations, an Offshore Assets Moves Penalty which is equivalent to an additional 50% of the standard penalty, is applied.  In these cases, the HMRC may also publish the individual’s details in line with the legislation for Publishing Details of Deliberate Tax Defaulters.

 

HMRC were very clear in their original advice saying that a lack of knowledge or understanding of the tax system and the new measures, would not qualify for a pardon.  Their message remains constant and advises that clients should urgently have their offshore tax status reviewed by an independent tax advisor as soon as possible.

 

Showing further evidence of the focus on offshore compliance and their willingness to use information becoming available to them under the CRS, HMRC have recently been issuing what are affectionately known in the industry as ‘nudge letters’ to taxpayers where they have information to indicate they have offshore assets. These letters encourage taxpayers to ensure their affairs are up to date before HMRC take action where they believe the correct tax has not been paid.

 

HMRC also now have an extended period of up to 12 years in which to enquire into the offshore elements of an individual’s tax return, regardless as to whether there was a reasonable care applied in the position taken, or a reasonable excuse for the error made on the return.

 

All this adds up to it being increasingly important to ensure that your affairs in respect of income and gains arising outside the UK are up to date in order to minimise the risk of additional penalties. This is an area in which we have worked with many clients so please do give our friendly team a call to discuss.

Share on Facebook
Share on Twitter
Please reload

Featured Posts

We're recruiting - please get in touch

August 20, 2019

1/9
Please reload

Recent Posts

October 14, 2019