Taxpayers with unreported offshore income, or are concerned an existing offshore arrangement may have become ineffective, have “only 10 months to bring their tax affairs up to date”, partner and tax investigations specialist at Blick Rothenberg, Gary Gardner, has warned.
In the Chancellor’s Budget on Wednesday (22/11/2017), the Government announced 18 new measures to tackle tax evasion and avoidance, which Mr Hammond claimed will bring in an additional £4.8 billion between now and 2022/23.
Mr Gardner stated that taxpayers who have not reported offshore income or have concerns regarding existing offshore arrangements becoming ineffective should “immediately disclose any irregularities and seek professional advice if they are concerned with the efficacy of any offshore interests, companies and trusts”.
He continued: “Refusing to do so by 30 September 2018 will expose those who do have additional tax to pay to criminal investigation or enormous fines (minimum penalty 100 percent of the additional tax!) for failing to correct offshore irregularities.”
Furthermore, Mr Gardner described the decision to extend HMRC’s time limits for raising assessments to 12 years (from four years) for non-deliberate offshore non-compliance as “an expected but still eye catching measure”. The measure is to be implemented following a consultation in Spring 2018.
“This will be a very welcome measure for the HMRC’s ability to recover unreported offshore income and dovetails with the relatively new ‘Requirement to correct’ and ‘Failure to Correct’ penalties, the inception of the automatic exchange of information, the Common Reporting Standard and the supposed new ‘Requirement to notify HMRC of offshore structures’ measure,” Mr Gardner added.
As HMRC already had a “formidable armoury of measures to tackle offshore evasion and avoidance”, the new measures are “the icing on the cake” and show a commitment to close the gap.
“The Government is claiming that the more than 100 measures that they have introduced since 2010 have recovered an additional £160 billion in tax,” Mr Gardner concluded.
“This is a significant figure but requires further scrutiny to understand how effective the measures have been, as both a deterrent and sanction in closing the tax gap.”
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