Ever since the financial crisis of 2008, offshore tax avoidance and evasion has become a sore subject for many in society.

We’re not here to debate the rights and wrongs of this. Like any good accountancy firm, our job is to follow the law and protect our customers. And the Requirement To Correct rules need to be taken seriously.

Requirement To Correct – what is it?

The Requirement To Correct (RCT) laws compels, in the words of HMRC, “those with undeclared offshore tax liabilities (relating to Income Tax, Capital Gains Tax or Inheritance Tax for the relevant periods) to disclose those to HMRC on or before 30 September 2018.”

If you declare after 30 September 2018, the level of penalties you face will be steep – up to 300%.

Given the recent publication of the Paradise Papers by the BBC and the Guardian (and the previous release of the Panama Papers), HMRC and other tax authorities around the world have far more information to go on than ever before.

Requirement To Correct – what are HMRC concerned about?

Offshore matters and offshore transfers.

An offshore matter is defined as any income, gains, or assets you hold or have made outside the UK. An offshore transfer is the transfer of any income or gains you’ve made in the UK or assets you’ve transferred outside the UK.

Specifically, HMRC are looking for a failure to complete a return, errors you’ve made in a return, or if you have not told HMRC that they should issue a return to you for completion.

You must correct any non-compliance up to and include April 5^th this year.

If HMRC have opened an enquiry into you already, you must submit all evidence and information by the 30^th September 2017. If they have not, you must make them aware of non-compliance by the same date.

Requirement To Correct – the penalties

If you have not complied by the 30^th September 2017, you will generally pay between 100% and 200% of the tax due as a penalty. What you will actually pay will depend on how HMRC deems your behaviour and cooperation.

If the tax due was more than £25,000, you may receive an additional 10% asset penalty and your name be released online as a tax evader.

If you have moved assets in a deliberate attempt to conceal them from HMRC, the fine may go up to 300%.

HMRC have indicated that if you provide a “reasonable excuse”, they may consider reducing the fine to zero.

Requirement To Correct – what about my second property abroad?

If you’re not making any money from your property and you have a native bank account associated with the property, you’ll be fine.

However, if you are renting it out or have sold it lately (be wary of capital gains tax here and in the country where the home was located), get in touch with Burton Beavan without delay.

Requirement To Correct – I have something I need to tell HMRC

You can declare your corrections to HMRC in two ways:

• Use their digital disclosure facility or
• Speak to an officer if you’re being investigated

BUT before you do that…

Requirement To Correct and up to 300% in penalties – talk to Burton Beavan

Requirement To Correct is here and it’s going to hurt a lot of people who never meant to evade taxes.

Tax rules change all the time. You’ve only got to look at payroll in the UK over the last 5 years to see that or buy-to-let taxation.

Tax is not easy to understand and because of that, it’s easy to find yourself completely innocently on the wrong side of the track.

Requirement To Correct is serious and you need the Burton Beavan team representing you.

Please call us on 01606 333 900 or email us at hello@burtonbeavan.co.uk and let’s look at the choices open to you right now.