As holiday makers flock to the airport in their droves and prepare for a week or two of rest and relaxation, the last thing on most people’s minds will be their tax returns.
Unfortunately, there is no such rest for HMRC.
Following recent controversies over tax evasion, HMRC have taken the opportunity to crackdown on undeclared overseas profits. Over the last few years, they have been collecting historical data from countries all over the world regarding UK taxpayers offshore financial information, and are now using this to uncover any discrepancies.
As a result, taxpayers have been given the opportunity to declare (or otherwise correct) any overseas tax liabilities by 30th September 2018. This is inclusive of any offshore income which should have been declared in the UK within the last 20 years, as well as capital gains and assets held outside of the UK.
Whilst most taxpayers dutifully oblige to HMRC requirements, there may be circumstances whereby profits have not declared correctly. Not necessarily intentional, many taxpayers may be blissfully unware of the ‘requirement to correct’.
Simply filing a tax return that reports all earnings and investment profits in the UK is not sufficient – the return must be inclusive of any overseas profits and taxed accordingly.
Although HMRC have started contacting some taxpayers to seek confirmation about overseas profits, please do not assume that because they have not made contact you are safe.
Failure to disclose the correct information will see HMRC impose a severe penalty regime, which can mean a penalty of 300% of the tax originally owed, and also carries with it criminal charges.
If you have any concerns regarding overseas profits within the last 20 years, or simply want to be assured your tax returns are accurate and inclusive of any overseas profits, we strongly advise that you seek professional advice. Get in touch with one of our tax experts today.