THE PARTY’S OVER
The overseas crackdown continues. If you have undeclared foreign income, HMRC is after you. Taxpayers are being hit by a deluge of letters warning them to disclose information by September 30th or … face the penalty.
A few weeks ago, we wrote about HMRC reaching overseas to former UK residents. This week’s blog is a mirror image. Our topic is HMRC’s increasing interest in your interests – your overseas interests.
HMRC are intensifying their crackdown on undeclared foreign income. Thousands of taxpayers are receiving letters warning them to disclose information by September 30th or face severe penalties.
A global initiative
Individuals, companies and trusts. HMRC are targeting them all with reminders to bring their tax affairs up to date before the deadline. They’re looking at all kinds of undeclared assets – savings accounts, government securities and rights or intellectual property. Debts too count as an asset.
These measures are not simply a UK initiative. They are part of a wider move against tax evasion. HMRC is bringing to bear over 3,200 treaties with more than 100 countries. This network is called the Common Reporting Standard. The CRS allows countries to exchange personal data about taxpayers – names, addresses, and capital gains. According to the agency, this data will ‘significantly enhance HMRC’s ability to detect offshore non-compliance.’
HMRC estimates that more than 50,000 taxpayers use loans and overseas trusts to avoid income tax. These regulations also apply to UK source income (or proceeds arising from a capital gain) that was moved overseas before 6 April 2017.
The clampdown also applies to those who have moved to the UK from overseas and still possess assets or income in their original country. For the purposes of the legislation, foreign territories include the Channel Islands, the Isle of Man and the Republic of Ireland.
Penalties set at 200% +
And don’t think that non-compliance will result in nothing more painful than a rap over the knuckles. We anticipate penalties will be as high as 200% (double the current amount) on any un-declared tax. There will also be asset-geared penalties of a further 10%. And if HMRC can show you attempted to avoid getting caught by hiding funds, you’ll be hit with extra penalties. You might also be named and shamed.
You don’t have long. Timely, voluntary disclosure will almost always result in less harsh penalties than if you try and conceal your affairs. And of course, the most advisable course of action? Speak to our financial experts here at Most Money. If in any doubt, call us. After all – we’re here to help!
This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Please, consult an attorney if you’d like to get an advice on your interpretation of our article.