HMRC have issued updated guidance on the Requirement to Correct (RTC) legislation.
The purpose of the RTC legislation is to require those with undeclared offshore tax liabilities (Income Tax, Capital Gains Tax or Inheritance Tax for the relevant periods) to disclose those liabilities to HMRC on or before the 30th September 2018.
The legislation sets out the different levels of mitigation for penalties for failure to correct, and extends the deadline by 90 days in some circumstances. HMRC have now said that they will not charge penalties where they have not received all information by the 30th September 2018 deadline, to anyone who:
* Was registered to use the Worldwide Disclosure Facility by the 30th September 2018 and makes the disclosure by the 29th December 2018.
* Where HMRC are already enquiring into their affairs, informs HMRC by the 30th September that they wish to make a disclosure of offshore tax non-compliance and submits an outline disclosure by the 29th November 2018.
* Informs HMRC by the 30th September 2018 that they wish to make a disclosure of deliberate behaviour involving offshore tax non-compliance via HMRC’s Contractual Disclosure Facility (CDF) process.
If the disclosure is not voluntary the minimum penalty level will be increased from 100% to 150% of the tax not corrected. The level of penalty mitigation they will offer will depend on how much assistance is given to them by the taxpayer:
* For telling: up to 30% of the maximum available reduction will be given
* For helping: up to 40% of the maximum available reduction
* For giving access to records: up to 30% of the maximum available reduction.
The message is clear …
We have set out above what is only a brief summary of some points that involve quite complex rules – always take appropriate advice.
We have set out above what is only a brief summary of some key points that involve quite complex considerations. Allowances, caps, levels and bases of, and reliefs from, taxation are subject to change and their value to you will depend upon your personal circumstances. Information and data may change after the date of their original promulgation in our Newsletter or this Focus article. Always seek relevant professional advice before taking, or refraining from taking, any action.
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