New HMRC Disclosure Opportunity
HM Revenue & Customs (“HMRC”) launched a new initiative on 5 September 2016, called the ‘Worldwide Disclosure Facility’ (“the Facility”), aimed at tax payers who have UK tax liabilities arising in connection with an ‘offshore issue’.
This opportunity is timed before the common reporting standard (“CRS”) fully comes into effect in 2018. Under the CRS, the UK will begin automatic exchange of information with over 100 other jurisdictions. The Facility will be the final chance for individuals to come forward before HMRC use CRS data and toughen their approach to offshore non-compliance.
In addition to the CRS, from the end of September 2016 the UK’s Crown Dependencies and overseas territories will start sending financial account information automatically to HMRC therefore the UK authorities will be in receipt of data to match to information disclosed previously.
In order to be eligible for this streamlined process, which is also open to individuals who are not resident in the UK, an individual must have a UK tax liability to declare in connection with an ‘offshore issue’ which includes:
1. income arising from a source in a territory outside the UK;
2. assets situated or held in a territory outside the UK;
3. activities carried on wholly or mainly in a territory outside the UK;
4. anything having effect as if it were income, assets or activities of a kind described above, including funds connected to unpaid or omitted UK tax that are transferred to, or owned in, a territory outside the UK.
Failure to take part in the Facility may lead HMRC to estimate any tax due and use their powers to seek payment through demands, personal visits and ultimately through the courts. HMRC may then seek tax geared penalties of up to 200% of the tax due if advantage has not been taken of this opportunity.
This latest initiative follows news earlier this year that HMRC brought in record tax revenues for the sixth consecutive year of £537 billion including £27 billion from compliance yield.
If you would like any further information or advice in connection with this, or assistance in making a disclosure, please contact our Tax Director, Jenny Marks.