Off Shore
The UK government’s present ‘No Safe Havens’ in shape of Off Shore accounts procedure means to guarantee there are no purview where UK citizens feel safe to conceal their salary and resources from the taxman. It also wants would-be offshore evaders to understand that in future the risks and punishments for evasion will become too great. With this in mind, new vigorously enforced sanctions are part of the plan Tax Accountant
New legislation in the form of the Requirement to Correct (RTC) now obliges taxpayers who have undeclared UK tax liabilities in respect of Off Shore interests to put things right by telling HMRC about the outstanding tax due. The consequence of not meeting the requirement by failing to carry out the necessary correction by 30 September 2018 would see the taxpayer liable to a new set of tougher penalties for a Failure to Correct.
The legislation was enacted in November 2017 following Royal Assent of the Finance (No2) Act 2017. It expects citizens to reveal any extraordinary UK impose identified with resistance, including seaward interests, as at 5 April 2017. This applies to offshore income tax, inheritance tax and capital gains tax. The legislation states that non-compliance means failure to notify or deliver a return, or other documentation. Inaccurate returns or documentation are another no-no.
Taxpayers who do not correct on or before 30 September 2018 face new penalties. These start at 200% of the offshore tax involved. They can be reduced to reflect disclosure, but not below a minimum of 100% of tax involved. In more serious cases the penalties can be increased even further. At the moment, a typical case has 30–40% penalties, but it has been estimated these same cases penalties will rise to 150% after 30 September 2017.
But there will be no failure to correct penalties if the taxpayer has a reasonable excuse for not correcting. A reasonable excuse, however, does not include relying on advice given by a person who:
- Did not have appropriate expertise.
- Neglected to assess all the citizen’s individual conditions (so far as significant to the issues to which the exhortation relates).
- Addressed it to, or gave it to, another person
In the Autumn Budget it was also announced that where HMRC identifies incorrect offshore tax that may have been declared due to non-deliberate mistakes or carelessness, a new minimum time limit of 12 years will apply for HMRC to make tax assessments or issue notices of determination. Penalties may also be due for the extended period if there has been a failure to take reasonable care. The government says that the reason for this decision is because it can take longer to establish the facts and determine the correct amount of tax due in cases involving offshore income, gains or chargeable transfers.
However, time limits where deliberate non-compliance is involved remain at 20 years in all cases (both onshore and offshore).
In cases involving UK income, gains or chargeable transfers, the time limits remain four and six years, depending on taxpayer behavior.
Draft legislation will now be published over the summer and final legislation will take effect in April 2019.
Read Further here https://www.gov.uk/government/policies/tax-evasion-and-avoidance
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