James Hender, a partner and head of Saffery Champness’ Private Wealth Group, has warned ‘unwitting targets’ that they could face penalties of up to 200% of their tax liabilities if they don’t come forward under requirement to correct (RTC) before 30 September 2018.
Not just the super-rich
“The new rules are certainly not just the concern of the super-rich or corporates,” said Hender
“For example, someone with a holiday home in the Dordogne (France) who hasn’t declared rental income on it in previous years, for example £10,000 ($13,573, €11,346) of unpaid tax, could be liable for a fine of up to £20,000 in addition to the tax.
“This could hit many people who perhaps have a niggle at the back of their minds that they may have forgotten something a few years ago on overseas interests.”
He added: “It could be the layman who has simply forgotten to report that will suffer the most, rather than serial tax avoiders.”
Heed the deadline
The tax liabilities are income tax, capital gains tax and inheritance tax accrued before 6 April 2017.
“To date, HM Revenue & Customs has been adopting the carrot approach to coax recalcitrant taxpayers to comply with the tax rules. However, from October this year, HMRC will be wielding the stick, and its stick is now big,” Hender said.
“To ensure that taxpayers come forward, taxpayers now have a legal requirement to correct their tax liabilities on offshore matters before the stick gets wielded.”
After the common reporting standard comes into effect on 30 September, the requirement to correct will be replaced by the failure to correct (FTC).
