Posted by Gary Mackley-Smith on August 23, 2017
Individual taxpayers throughout the UK are being contacted by their advisers about new tax office powers to see overseas information.
Bishop Fleming clients are being contacted as part of this government-led requirement.
Financial and tax advisers have until 31 August 2017 to inform their clients about the new powers, or face a £3,000 fine.
Individuals with overseas interests are being made aware of new information sharing agreements with more than 100 countries around the world which will provide HM Revenue & Customs (HMRC) with detailed information about overseas assets, to ensure tax is not being avoided.
A HMRC-branded information sheet is required to be sent to all relevant clients, together with a covering letter or email.
This is all part of a crackdown on tax avoidance, and is meant to encourage any person with UK tax irregularities related to offshore interests to correct their liabilities by 30 September 2018.
After this date, any person who is found to have failed to have corrected their affairs will be subject to tough new penalties, so clients need to be informed in order that they can come forward now and declare any overseas income and offshore assets left off their returns.
It is not just financial and tax advisers who are required to contact their clients; the requirement also applies to banks, building societies and solicitors.
Advisers can choose to take a “specific” approach, contacting only clients that have been provided with advice about their offshore interests, or a “general” approach, contacting all clients that have been provided with tax advice in the year to 30 September 2016.
Some doubts have been expressed as to how thorough HMRC will follow up on this initiative as it is currently undergoing a large reorganisation, leading to many jobs losses, and may thus not have the resources to cope with the results.
If you wish to discuss this development and how it may affect you, please contact your usual Bishop Fleming adviser or a member of our Personal Tax team.