The Government has recently published a new consultation document which proposes a Requirement to Correct (RTC). UK taxpayers with offshore holdings could soon be subject to new legal obligations to correct UK tax irregularities, with significant sanctions if they fail to comply on or before 30 September 2018. Ahead of the new sanctions being introduced, HMRC have also launched a new Worldwide Disclosure Facility (WDF), to enable taxpayers to correct past irregularities in their tax affairs.
By 30 September 2018 HMRC will be receiving Common Reporting Standard (CRS) data from around 100 countries, which will allow them to identify and pursue those who have not come forward to regularise their affairs.
Any person who is found to have failed to have corrected their affairs will be subject to a new set of sanctions. Under one proposal, this would include penalties in the range of a minimum of 100 percent up to 200 percent, as well as a 10 percent asset based penalty and ‘naming and shaming’ of those who failed to correct.
It is envisaged that the RTC will encourage taxpayers to review their affairs and take advice as appropriate to assure themselves that their offshore interests are tax compliant and if not to correct this.
HMRC have also announced a new Worldwide Disclosure Facility to enable those who may be affected to come forward to settle their tax affairs, This was launched on 5 September 2016.
The WDF requires the disclosure of UK tax liabilities that relate wholly or partly to an offshore issue and requires:
The WDF provides no immunity from prosecution, and is not the only way to make a disclosure to HMRC.
If you would like to discuss these recent developments and any impact they may have on your tax affairs, then please get in touch with your usual KPMG Private Client contact or the named contacts.
Tel: +44 20 73112618
Tel: +44 20 73112173