Following a recent campaign to encourage UK taxpayers to declare any foreign income or profits on offshore assets, leading accountant Bevan Buckland LLP has been busy assisting clients with this area of concern.
The rise in enquiries comes just months after the passing of the deadline set by HM Revenue & Customs (HMRC) – taxpayers had until 30th September 2018 to come forward. Failure to declare any offshore assets and incomes now will certainly mean higher tax penalties.
The UK is just one of more than 100 countries who has introduced new legislation, namely the ‘Requirement to Correct’. The new law dictates that all participating countries will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance. It is therefore in taxpayers’ interests to correct any non-compliance before that data is received.
“Despite the passing of the recent deadline, as a UK taxpayer, you must still come forward to declare any offshore tax assets or income. It still remains better to disclose than to get caught and face penalties. All tax liabilities relating to income subject to tax in the UK must be declared,” said Lee Bradley, Tax Director at Bevan Buckland LLP.
It’s simple to correct your tax liabilities. Taxpayers can use the digital disclosure service as part of the Worldwide Disclosure Facility or any other service provided by HMRC as a means of correcting tax non-compliance. You can also inform an officer of HMRC in the course of an enquiry into your affairs or use any other method agreed with HMRC. After making your declaration to HMRC, you’ll have 90 days to make a full disclosure and pay any tax owed.
“Some taxpayers may be unsure of whether they are required to declare overseas financial interests. Under the rules, actions like renting out a property abroad, transferring income and assets from one country to another, or even renting out a UK property when living abroad could mean taxpayers face a tax bill in the UK. The most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad. If taxpayers are confident that their tax affairs are in order, then they do not need to worry. If anyone is unsure, HMRC recommends they seek advice from a professional tax adviser or agent like ourselves,” concluded Lee.