HMRC guidance regarding its requirement to correct (RTC) has been updated and provides certainty on how the deadline by which taxpayers must bring their offshore tax affairs up to date will be applied. HMRC has confirmed that, so long as it has been notified of a taxpayer’s intention to disclose by 30 September 2018 using its online worldwide disclosure facility (WDF), the taxpayer will be considered to have met the deadline. However, this still leaves only a short window to address any historical offshore tax issues and the full disclosure must still be submitted to HMRC within 90 days of the initial notification.
Why should I be concerned with RTC?
Taxpayers with underdeclared tax on offshore income sources for periods up to 5 April 2017 are required to correct their position by the 30 September deadline outlined above. Failure to correct (FTC) by the deadline will result in HMRC issuing FTC penalties of between 100 per cent and 200 per cent of any tax relating to such offshore income sources it subsequently establishes to have been underpaid, plus asset based penalties and potential criminal prosecution for more serious cases.
My affairs are overseas - how would HMRC know?
The 30 September deadline to come forward is not coincidental. By this date, HMRC will have received unprecedented amounts of information from all over the world under the Common Reporting Standard (CRS). For those that fail to come forward, HMRC has given itself until 5 April 2021 to review the information it receives and consider if it needs to investigate.
I’ve previously taken tax advice, can I ignore RTC?
Having received tax advice in the past doesn’t preclude you - given recent changes in tax law surrounding overseas assets and income, those who took advice even only two or three years ago could still have an undisclosed liability. We therefore recommend that anyone with overseas assets that hasn’t sought tax advice since April 2017 contacts an appropriate expert to discuss their tax affairs.