Worldwide tax disclosure ‘last chance’
A new online tax disclosure facility, launched on 5 September, provides those with offshore investments with a final opportunity to settle the tax on any undeclared assets on favourable terms. This comes ahead of new data sharing arrangements and the introduction of tougher sanctions.
HMRC’s Worldwide Disclosure Facility (WDF) will replace the region specific tax amnesties and settlement agreements, such as the Swiss UK tax agreement and the Liechtenstein Disclosure facility.
The WDF hopes to encourage those with offshore investments and bank accounts to correct their arrangements, and pay outstanding tax on offshore money or assets, before the introduction of the Common Reporting Standard (CRS) in September 2017 and tougher sanctions in September 2018.
HMRC have been clear that, unlike previous incentivised arrangements, the WDF will offer no special terms, with those that come forward having to pay the tax in full and inclusive of interest. They could also still face criminal prosecution but the quality of the information disclosed will be taken into account. The length of time it has taken for someone to put their tax affairs in order will also be taken into account before calculating penalties.
This ‘last chance’ comes before HMRC start to receive an unprecedented amount of data on offshore holdings through international cooperation and global tax transparency with over 100 countries, thanks to the CSR. HMRC will begin to receive this data as early as 31 December 2016, so those with undisclosed offshore tax liabilities should consider seeking advice sooner rather than later.
Combining the ‘making tax digital’ initiative with greater cross-border transparency is designed to help HMRC reach its tax avoidance targets. If you’re concerned about anomalies in your tax accounts, then please speak with us.
If you are comfortable matters are up to date, but would like to ensure you will have professional support if you receive an ad hoc tax enquiry, fee protection insurance offers a cost effective option.