When it comes to fulfilling your tax and National Insurance (NI) obligations, compliance is everything.
HM Revenue & Customs (HMRC) has recently highlighted a new area of concern for UK taxpayers, urging those who haven’t already done so to declare any foreign income or profits on offshore assets.
Taxpayers have until 30thSeptember 2018 to come forward. Failure to declare any offshore assets and incomes could mean higher tax penalties, one thing leading accountancy firm Bevan & Buckland is keen for its clients to avoid.
The introduction of new legislation, namely the ‘Requirement to Correct’, will impact more than 100 countries, including the UK, as of 1stOctober 2018. From this date, all countries will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received.
“If you are a UK taxpayer, it’s extremely important that you come forward and declare any offshore assets or income before the 30thSeptember 2018 deadline to avoid any tax penalties. HMRC must be notified of all offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax,” said Lee Bradley, Tax Director at Bevan & Buckland Chartered Accountants.
Over 17,000 people have already contacted HMRC to notify the department about tax due from sources of foreign income, such as their holiday homes and overseas properties.
It’s simple to correct your tax liabilities. Taxpayers can use the digital disclosure service as part of the Worldwide Disclosure Facility or any other service provided by HMRC as a means of correcting tax non-compliance.You can also inform an officer of HMRC in the course of an enquiry into your affairs or use any other method agreed with HMRC. After making your declaration to HMRC, you’ll have 90 days to make a full disclosure and pay any tax owed.
“Some taxpayers may be unsure of whether they are required to declare overseas financial interests. Under the rules, actions like renting out a property abroad, transferring income and assets from one country to another, or even renting out a UK property when living abroad could mean taxpayers face a tax bill in the UK. The most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad. If taxpayers are confident that their tax affairs are in order, then they do not need to worry. If anyone is unsure, HMRC recommends they seek advice from a professional tax adviser or agent like ourselves,” concluded Lee.
For further information about declaring offshore assets and income ahead of the deadline next month, please contact Bevan & Buckland on 01792 410100. Alternatively, email [email protected].