Time is running out for anyone with offshore assets before tougher penalties kick in, as HM Revenue and Customs (HMRC) publishes proposals to allow more time to investigate when someone hasn’t declared the right amount of tax.
The new, tougher penalties take effect from 1 October 2018 and HMRC’s advice is that anyone with overseas assets needs to put their cards on the table quickly or risk much bigger fines. As is always the case, HMRC will prosecute the most serious cases of tax evasion.
The Director General for Customer Strategy and Tax Design at HMRC, David Richardson, said:
Everyone has to pay their tax, and the vast majority of people and businesses already do. It’s on their behalf that we’re cracking down on offshore tax cheats.
These new penalties are part of the government’s drive to ensure there are no safe havens for taxpayers that seek to evade paying tax. HMRC already holds a vast amount of data on offshore assets, and this is growing all the time.
The majority of taxpayers with offshore assets already disclose them in line with UK law so have nothing to worry about, but time is running out for the minority of tax dodgers.
The government recognises that some people may not realise that they must declare their overseas income to HMRC if, for example, they have worked overseas or are receiving income from a rental property outside the UK.
People with overseas income who aren’t sure they’ve paid the correct tax are urged to check HMRC’s guidance and contact HMRC, if necessary, before the new, tougher penalties take effect.
HMRC has recently published a consultation on the implementation of a new minimum time limit of 12 years, announced at the Autumn Budget 2017, for HMRC to assess offshore tax.