No hiding from Taxman’s offshore clampdown

In an effort to crackdown on offshore tax evasion, HM Revenue & Customs (HMRC) is implementing a new regime which will allow them and other tax authorities around the globe to check that the correct amount of tax is paid on any money held abroad.

INCREASING TRANSPARENCY AND INTERNATIONAL REACH

If you hold any offshore assets, including Bonds, Pensions, and Bank Accounts, your financial and tax advisers will be required to notify you that HMRC will begin to receive information on offshore accounts from more than 100 jurisdictions from 2017. At the same time, HMRC will begin to share information with other tax authorities on accounts held in the UK, increasing cross border taxation transparency.

For those failing to pay tax or the correct amount of tax on their offshore assets the penalties are set to increase; those evading tax could even face criminal prosecution. New rules mean that individuals could face further penalties based on the value of the asset as well as the tax due.

ARE YOUR TAX AFFAIRS UP-TO-DATE?

HMRC are keen to point out that it is the individual’s responsibility to check and declare all of their tax liabilities.

If you are confident that your tax affairs are in order and you have declared all of your UK tax liabilities, no action is required.

If you need to bring your tax affairs up-to-date you can use HMRC’s online disclosure facility which allows non-compliant taxpayers to correct their tax affairs under certain terms before HMRC start to receive data.

It is also important to consider the effect of any changes in your personal circumstances, such as a recent inheritance of overseas assets which will require disclosure.

The message from the tax authorities is clear “come to us before we come to you”.

ADVISERS TAKE ACTION

Financial intermediaries, investment houses and tax advisers should make their clients aware of their need to disclose any offshore holdings they have when submitting their tax return.