HMRC has published guidance on a letter which tax advisers and financial institutions may need to send to clients who have income or assets overseas, explaining its wider powers to exchange tax information with other jurisdictions and urging anyone who is in doubt about their offshore tax position to seek advice
The guidance says the notification letter applies to any client who is given advice or services relating to offshore self-employment income, sets out who needs to send notification letters, which clients are covered and when they need to be sent.
It also gives information on ways to identify clients depending on whether they give tax advice or are a financial institution. Financial institution that refer a client to another institution for an overseas account will still need to send them a notification letter.
The letter states that from 2016, HMRC is getting new financial information about taxpayers from more than 100 jurisdictions – including details about overseas accounts, structures, trusts, and investments.
It says: ‘You need to regularly check that you have declared all of your UK tax liabilities and, if needed, bring your tax affairs up-to-date. This is your responsibility.’
The letter mentions the worldwide disclosure facility and urges anyone who is unsure about their tax position to consult an advisor.
It says: ‘Penalties are increasing for those who are not paying the right amount of tax on their offshore assets, and you can even face criminal prosecution. Under new rules, you could face further penalties based on the value of the asset as well as the tax due, resulting in potentially life-changing consequences. If you choose to delay in coming forward, it’s very likely to cost you more and there is also more chance that HMRC will come for you.’
HMRC guidance, Client notification: income or assets abroad, is here.
