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HMRC ‘puts people on notice’ with duty to correct tax return

Philip Hammond

Advisers will need to inform clients of new changes to offshore tax disclosure as the government introduces a new legal requirement to correct past failures, experts warn.

As part of the Autumn Statement today, the Government said it would put in place a new legal “requirement to correct” a past failure to pay UK tax on offshore interests, with new sanctions for those who fail to do so.

The relevant information will need to reach HM Revenue and Customs by the end of September 2018 as the government eyes introducing the measure in next year’s Finance Bill.

BDO tax dispute resolution partner Dawn Register says: “HMRC is putting people on notice that if they do not put their UK tax affairs in order by 30 September 2018 then the consequences will be severe. With a no excuses policy.

“This is going to shine a spotlight on individuals with any offshore related tax matters, to check and double check that their UK filings are accurate.”

“Advisers are also going to feel under pressure to ensure there are no technical mistakes. We expect this will lead to an increase in voluntary disclosures prior to the expected deadline of 30 September 2018. By making this a legal requirement, HMRC is really giving teeth to the message that people who do not get their tax affairs in order will face severe consequences.”

Meanwhile, the Government will also be consulting on a law for advisers arranging complex structures for clients holding money offshore forcing them to declare the structures and the related client lists to HMRC.

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  1. To quote Admiral Ackbar……….IT’S A TRAP!!!!!

    This is now the usual despicable behaviour we are seeing across the board with conflicting legislation and guidance from HM Government, Treasury & HMRC, all with the aim of coercing individuals who can’t defend themselves (low hanging fruit) to ‘voluntarily’ pay more tax

    What they are asking is for people to lie on their tax returns, in this instance, if you have any offshore interests, people are being asked to use the white space at the base of the SA return form to declare other monies etc as INCOME, irrespective of whether it is.

    This will give HMRC a win-win, because you’re either now declaring additional income so you’ll get taxed on it and a possible avenue to open enquiries in to previous years or you’ve just lied on your SA by stating you’re receiving income when in fact you’re not so you’re going to get taxed for the income that didn’t exist and you’re subject then to x number of enquiries, but this way, when you contest it and say you didn’t receive the income, you’ve just admitted to a fraudulent SA submission.

    We have already seen some quite threatening letters of this type being issued out by HMRC recently, once again it is placing the recipient in a position of being guilty and liable without breaking any laws.

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