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New penalties for failure to correct offshore tax matters

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Accountancy industry experts are warning taxpayers to carefully consider the government’s proposed new penalties for failing to correct previously undeclared UK tax liabilities in respect of offshore interests.

Under proposals which are due to become law by the end of the year, the government's ‘Requirement to Correct’ regime obliges taxpayers with such undeclared past UK tax liabilities to correct their UK tax affairs by 30 September 2018, or face tough new penalties.

The new rules mean that taxpayers could face stringent penalties based on the value of the assets, as well as the tax due.

This builds on a new criminal offence for tax evasion introduced in 2016 for those who fail to declare offshore income or gains.

HMRC now has access to financial information regarding taxpayers from more than 100 overseas jurisdictions, including information relating to overseas interests.

For more information on the taxation of offshore assets and the requirement to correct, please contact us.