In 2014 almost all governments worldwide agreed to exchange financial information, known as the Common Reporting Standards (CRS) which is now in full flow and allowing HMRC to receive unprecedented amount of information on offshore assets and income of UK residents.
HMRC are now therefore advertising the Worldwide Disclosure Facility (WDF) as a last chance for those with UK tax issues to come forward voluntarily before HMRC starts to use CRS data and find and penalise those that have not disclosed.
Current penalties under WDF which are based on the behaviour that lead to the non-disclosure are:
These penalties can go up to 200% depending on the overseas territory where the income or gain arose.
Taxpayers need to notify HMRC by 30 September 2018 of their intention to disclose any non-reported offshore income and gains. The tax payer then has 90 days to provide HMRC with the full disclosure.
Failure to notify HMRC by 30 September 2018 and disclose will result in a failure to correct (FTC) penalty of 200% of the unpaid tax, this penalty can be reduced to 100% by full co-operation of the taxpayer.
Taxpayers with undisclosed offshore income or gain that gives rise to a tax liability of £25,000 or more could face an immediate fine and/or a prison sentence of up to 51 weeks.
If you require further information about offshore earning and necessary disclosures please contact us on firstname.lastname@example.org.