HMRC’s Requirement to Correct deadline looms – are you prepared?

Requirement to Correct deadline

20th August 2018

At 6CATS, we’ve written extensively about the ways that authorities worldwide are ramping up their actions against tax evasion. There’s no doubt that compliance is becoming more complex and the penalties and risks are greater than ever.

Undeclared offshore income is a real risk

One step taken by the UK’s Her Majesty’s Revenue and Customs (HMRC) as part of the global clampdown is the forthcoming ‘The Requirement to Correct’ (RTC) legislation which we blogged about back in May. When these new rules come into force in October, there will be tougher penalties for those with undeclared income from offshore assets.

With the clock ticking, HMRC has now issued a warning that affected individuals must notify it of their intention to make a declaration by 30th September. They will then have 90 days to make the full disclosure and pay any tax owed. If they fail to do so, they will face serious consequences.

The crackdown on tax evasion continues

Speaking of the impending RTC legislation, the Financial Secretary to the Treasury, Mel Stride MP, warned: “This new measure will place higher penalties on those who do not contact HMRC and ensure their offshore tax liabilities are correct. I urge anyone affected to get in touch with HMRC now.”  He also added that since 2010, the UK tax office has recovered £2.8bn in evaded tax, and that it “will continue to relentlessly crack down on those not playing by the rules.”

Although the Revenue reports that over 17,000 affected individuals have already been in contact, it is likely that many more have not yet done so.  In a statement, it cautions that “some UK taxpayers may not realise they have a requirement to declare their overseas financial interests,” and adds that, “under the rules, actions like renting out a property abroad, transferring income and assets from one country to another, or even renting out a UK property when living abroad could mean taxpayers face a tax bill in the UK.”

Compliance must be the number one priority

With the rules around compliance growing more complex, the risks are increasing for agencies which place contractors abroad. It is vital that professionals are making the relevant declarations and paying the correct tax on any foreign revenue, so businesses really must make compliance their number one priority. Speak to an expert today.

Contact the team to find out more.


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