In the last few weeks HMRC has commenced its latest campaign using the initial wave of Common Reporting Standard (CRS) data.
But is the campaign well targeted?
Initial indications perhaps suggest not.
Final Opportunity to Bring Worldwide Affairs Up To Date
So says HMRC.
HMRC’s latest campaign highlights it is starting to receive new information about offshore accounts, trusts and investments from jurisdictions around the globe.
The Common Reporting Standard (CRS) is swinging into action and yielding some unexpected targets.
HMRC’s communication bluntly states “Our information indicates you may currently have, or previously had, income or gains from offshore money or assets.”.
So is HMRC’s target radar well focussed?.
Who are the Targets?
Arguably taxpayers who intentionally or inadvertently have not fully disclosed income and/or gains to HMRC.
But with the focus so wide unintended targets are drawn into HMRC’s sphere of interest.
A taxpayer may have unwittingly omitted completion of, say, the Foreign Pages from their tax return, but that maybe the only failing and no additional tax maybe due.
HMRC’s radar is not that sharp to identify such distinctions and early indications suggest there will be inappropriate targets.
Worldwide Disclosure Facility (WDF)
HMRC’s stated solution is the Worldwide Disclosure Facility (WDF).
But is the WDF the only solution?
No. And in some cases the WDF will not be appropriate.
HMRC do not highlight alternative routes to bring matters up to date.
The Scary HMRC Message
HMRC pose the question what happens if tax is owed but a disclosure isn’t made under the WDF?
HMRC’s answer being:
- higher penalties
- potentially commencing civil or criminal investigations
- naming and shaming the taxpayer
Pretty big incentives to bring affairs up to date.
However, the HMRC message is one dimensional and does not consider the possibility that in bringing matters up to date there may be no additional tax and therefore the WDF would be inappropriate.
What Taxpayers Need to Do?
Do not ignore the HMRC communication.
See professional advice; whether that be to make a disclosure via the WDF or via an alternative route.
If you receive a HMRC Worldwide Tax Affairs communication and wish to discuss your options, please contact me at email@example.com or Paul at firstname.lastname@example.org.