On 30 September 2018 the opportunity tell HMRC about undisclosed overseas income or assets under the current terms of the HMRC Worldwide Disclosure Facility (WDF) will end.
HMRC's Worldwide Disclosure Facility (WDF) is running in it's current format until 30 September. This is an opportunity to disclose any UK tax liability relating wholly or partly to off-shore (non-UK) income or gains which have not previously been disclosed to HMRC. An increase in global tax transparency means that HMRC are obtaining financial information regarding off-shore assets.
By making a disclosure before the deadline, you will benefit from a reduced penalty and it will be treated as an unprompted disclosure. Penalties will be based on the jurisdiction in which the previously undisclosed off-shore income / gains have arisen and whether your behaviour in regards to off-shore assets was 'careless', 'deliberate' or 'concealed'. Penalties for unprompted disclosures can be as low as 0%-30% for careless and 20% - 70% for deliberate. If you do not make a disclosure by 30 September 2018 and HMRC later prompts you to disclose, the penalty could be as high as 200% of the unpaid tax.
The disclosure period will depend on the quantum of income or gains arising and your behaviour, however it will not exceed 20 years. Any capital or income arising outside the 20 years will not be required to be disclosed.
The process for making a disclosure does not need to be burdensome. It is important to note that after 30 September 2018, new sanctions under Requirement to Correct will be introduced that reflect HMRC’s toughening approach. You can still make a disclosure after that date but the new terms will not be as good as those currently available.
Our tax team is available to help you through the process if you wish to make a disclosure.
As previously communicated by HMRC:
"From 2016, HM Revenue & Customs (HMRC) is getting an unprecedented amount of information about people's overseas accounts, structures, trusts, and investments from more than 100 jurisdictions worldwide, thanks to agreements to increase global tax transparency. This gives HMRC unprecedented levels of information to check that, as in most cases, the right tax has been paid.
If you have already declared all of your past and present income or gains to HMRC, including from overseas, you do not need to worry. But if you are in any doubt, HMRC recommends that you read the factsheet attached to help you decide now what to do next."
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Whilst every effort has been made by CavanaghKelly to ensure the accuracy of the information here, it cannot be guaranteed and neither CavanaghKelly nor any related entity shall have liability to any person who relies on the information herein. Information given here is for guidance only. Detailed professional advice should be taken before acting on any information contained herein. If having read the guidance here, you would like to discuss further; a member of our team would be pleased to help you.