Taxpayers who have unreported offshore income have only 10 months to bring their tax affairs up to date
The Government has responded to public and media pressure following the latest revelations in the ‘Paradise Papers’ and have announced eighteen new measures to tackle evasion and avoidance, which they say will bring in an additional £4.8 billion between now and 2022/23.
“Taxpayers who have unreported offshore income or are concerned an existing offshore arrangement may inadvertently have become ineffective have only 10 months to bring their tax affairs up to date,” said Gary Gardner, partner and tax investigations specialist at Blick Rothenberg.
“They should immediately disclose any irregularities and seek professional advice if they they are concerned with the efficacy of any offshore interests, companies and trusts. Refusing to do so by 30 September 2018 will expose those who do have additional tax to pay to criminal investigation or enormous fines (minimum penalty 100% of the additional tax!) for failing to correct offshore irregularities,” he added.
Gardner said: “An expected but still eye catching measure to extend HMRC’s time limits for raising assessments to 12 years (currently 4 years) for non-deliberate offshore non-compliance will be implemented following a consultation in Spring 2018.
“This will be a very welcome measure for the HMRC’s ability to recover unreported offshore income and dovetails with the relatively new 'Requirement to Correct' and 'Failure to Correct' penalties, the inception of the automatic exchange of information, the Common Reporting Standard and the supposed new ‘Requirement to notify HMRC of offshore structures’ measure.”
He added: “HMRC already had a formidable armoury of measures to tackle offshore evasion and avoidance and these measures are the ‘icing on the cake’ demonstrating a continued commitment to close the tax gap.
“The Government is claiming that the more than 100 measures that they have introduced since 2010 have recovered an additional £160 billion in tax. This is a significant figure but requires further scrutiny to understand how effective the measures have been, as both a deterrent and sanction in closing the tax gap.”
For more information, please contact partner Gary Gardner at email@example.com