Offshore tax liabilities? Declare it now for a more favourable rate
Up until 2016 HM Revenue and Customs (HMRC) gave incentives to encourage people to come forward and clear up their offshore tax affairs. That’s no longer the case. Over 100 countries have committed to exchange information on a multilateral basis under the Organisation for Economic Co-operation and Development Common Reporting Standard (CRS). The CRS will increase international tax transparency.
However, before automatic exchange and new sanctions come into force, the Worldwide Disclosure Facility (WDF) will be the final chance to inform HMRC prior to the introduction of CRS data and a toughened up approach to offshore non-compliance.
WDF came into action earlier this month and will be in place until 30 September 2018, after which CRS sanctions come into place. You will still be able to make a disclosure after that date but new terms will not be as good as those available under WDF.
Who can use the WDF?
Anyone who wants to disclose a UK tax liability relating to an offshore issue can use WDF. An offshore issue includes unpaid or omitted tax relating to:
- income arising from a source in a territory outside the UK
- assets situated or held in a territory outside the UK
- activities carried on wholly or mainly in a territory outside the UK
- anything having effect as if it were income, assets or activities of a kind described above
Investigating the disclosure
All disclosures made will be referred to an investigating officer to decide whether HMRC are able to accept. If a settlement has been made following an enquiry before, HMRC will consider your new disclosure for further investigation and if it covers the same period, you may face a higher penalty.
If you’re unsure whether you meet the eligibility criteria for the facility you must seek professional advice.
I think I may have something to disclose, what now?
If you believe you have an offshore tax liability to disclose or would like to discuss your tax affairs in more detail, please call our Tax Department today on 0121 711 2468 / 024 7651 8555 or email [email protected] where you will be directed to the most appropriate member of the team.