This Content Was Last Updated on September 21, 2018 by Jessica Garbett
HMRC are introducing significantly increased penalties on tax arrears and misdeclarations relating to offshore assets from 30 September 2018.
To this end if you have tax arrears or misdeclarations related to assets outside of the UK a disclosure should be made by 30 September to minimise penalties.
HM Revenue & Customs’ guidance on this can be found at https://www.gov.uk/guidance/offshore-disclosure-facilities HMRC have called this The Requirement to Correct and it gives HMRC the powers to tackle those who don’t declare the correct amounts of tax due on their offshore income and assets. More in depth rules can be found at https://www.gov.uk/guidance/requirement-to-correct-tax-due-on-offshore-assets
If you do have undeclared income and gains from your overseas accounts, you need to go online to the Digital Disclosure Service (DDS) to clear up your past tax affairs. You should also make sure that you declare all relevant income and gains in your next Self Assessment tax return. The deadline for the disclosure, as mentioned above, is 30 September so you need to act fast in order to keep any penalties at a sensible level. This new regime enables HMRC to charge penalties of up to 200% of the eventual tax liability.
Once a declaration on intention is done you then have 90 days in which to provide HMRC with the information needed to assess any liability.
HMRC is obtaining more and more information from financial institutions so may become aware in future months of any in-declared income. By not completing the online declaration now you may be leaving yourself open to a future investigation. However, if you are unsure as to whether you may need to make a declaration please contact us for advice.