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Tuesday, 20 March 2018

HMRC is warning about offshore tax dodging

The countdown has begun before strong penalties, for anyone, who did not uncover his offshore
belongings to the HM Revenue & Customs. In fact, the agency is taking the time to inspect closely undeclared revenue abroad.

Source: www.lifehacker.co.uk
UK taxman recommended recently that any offshore assets have to be brought to light or the owner would face huge fines. “As is always the case, we will prosecute the most serious cases of tax evasion” warned the HMRC.

Penalties for the new policy could hit 200% according to the agency and would be set up from October 1st, 2018. This is a government move to prevent taxpayers from planning to get their assets in safe heavens and avoid what is owed to the state. The relevant consultation document legislates to extend periods of tax investigation for overseas income; it will be effective on May 14th, 2018. Investigation period limits would then triple from 4 to 12 years according to regulators. 

Transparency Overseas 
Information on offshore assets is collected regularly and the database is constantly “growing” said the tax man. Indeed, the Common Reporting Standard (CRS) allow the tax agency to access loads of data on citizens’ potential offshore assets. “Everyone has to pay their tax and the vast majority of people and businesses already do. It’s on their behalf that we’re cracking down on offshore tax cheats” said the HMRC’s General Director for tax design and customer strategy.

Awareness 
Sometimes UK citizens are not aware they must declare offshore assets, says the UK Government. If a property is owned overseas that produces income or a business is owned abroad - this can be confusing when it comes to tax compliance. In fact, past financial advice does not hold anymore, since laws and regulations evolve constantly. The tax man added that it has “unfortunately seen taxpayers who’ve sought guidance, in good faith, get caught out because the advice has been out of date”. So taxpayers should keep up with these changes. 

Tick tock 
HMRC declared that most taxpayers with overseas assets already disclosed them, as UK law requires it. However, reminded that “time is running out for the minority of tax dodgers”

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