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ARTICLE · 05 DECEMBER 2017

Increased HMRC Powers For Challenging Offshore Tax Non-Compliance

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There has been an extension of HMRC's powers for challenging offshore tax non-compliance with further proposals in the pipeline announced in last week's Budget.

United KingdomTax
Richard Harvey
Richard Harvey

There has been an extension of HMRC's powers for challenging offshore tax non-compliance with further proposals in the pipeline announced in last week's Budget.

First, a new 'requirement to correct' any offshore non-compliance is now in force. Affected taxpayers must disclose to HMRC any offshore non-compliance giving rise to a UK tax liability outstanding as at 5 April 2017. The deadline for taking this step is 30 September 2018.

Where outstanding UK non-compliance has not been disclosed to HMRC by this date, penalties for 'failure to correct' will arise, starting at 200 per cent of the tax liability (which can be reduced, but to no lower than 100 per cent). This will be in addition to normal penalties and interest in respect of the underlying tax liability. Taxpayers will have a defence only if they had a reasonable excuse for failing to correct. The legislation specifically excludes tax advice received in certain situations. For example, advice given by a person

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