This article has been submitted by Grant Thornton
There is a six month deadline for taxpayers to regularise their tax affairs in order to avoid significant penalties under the Failure To Correct (FTC) regime. HMRC is strongly suggesting that the affairs of taxpayers who have offshore interests are reviewed prior to 30 September 2018 to ensure they have been and remain to be, tax compliant in the UK.
Grant Thornton Cardiff is drawing attention to this pressing matter as the Requirement To Correct (RTC) has implications for all individuals and entities subject with undeclared income tax, capital gains tax and/or inheritance tax liabilities – namely, individuals, partnerships, trustees or non-resident landlord companies.
HMRC has confirmed that it has embarked upon investing in resource to ensure it is adequately equipped to analyse and review this information to issue tax enquiries and pursue criminal prosecutions against taxpayers who have deliberately failed to pay the correct tax due.
In addition to the above, the penalty regime under FTC will include, under certain circumstances:
- an asset based penalty of up to 10% of the relevant asset value,
- the naming and shaming of taxpayers and
- an additional penalty of 50% of the amount of the standard penalty, if it can be demonstrated that taxpayers moved assets in order to avoid the details being reported to HMRC under the international agreements on exchange of information.
It is clear from HMRC’s guidance that penalties may be charged whether the irregularities came about because of a genuine mistake or if they came about because of careless, deliberate or fraudulent behaviour.
Grant Thornton Cardiff are offering a tax risk assessment/health check for anyone wishing to assess whether there are any irregularities, which require disclosure to HMRC. Their Tax Investigations and Disputes team, comprising of qualified tax advisors and former HMRC inspectors is extensively experienced in undertaking such tax health checks and further to this, are proficient at identifying and discussing with taxpayers and/or their advisors the best routes to regularise their tax affairs.
If you are interested to hear more please contact Senior Tax Manager Claire McRea who will be happy to help.