HMRC has released a consultation document detailing proposals of new Requirement to Correct (RTC) legislation. The proposed legislation will require any person that has undeclared UK tax liabilities in overseas interests to correct the situation by disclosing the appropriate information to HMRC. This proposal aims to compel such persons to put their UK tax affairs in order ahead of the widespread adoption of the Common Reporting Standard (CRS). By 2018, over 100 countries will be implementing the CRS and exchanging financial information amongst one another which may be used to discover cases of tax evasion. The UK will be adopting CRS in September 2018 and following this, there will be a simplified and more severe set of sanctions for off...

Government plans are set to put more pressure on users of disguised remuneration schemes; including employers, employees, and the self-employed.  Users of these schemes should consider how best to settle any outstanding liabilities as soon as possible. Disguised Remuneration Schemes (DRSs) Whilst each scheme operates differently, promoters of DRSs will often claim that they are an effective way to avoid substantial Income Tax and National Insurance Contributions. Common characteristics include low or no interest loans that will never be repaid in practice, investments of employee's 'earnings' by third parties, and complex networks of third party trusts and companies (often based outside the UK). Previous Action A number H...

HM Revenue & Customs have announced the targets of their latest Task Force. The group to come under the microscope next will be property owners who are either letting or selling property and not declaring the income tax or capital gains tax due. Initially the taskforces will be primarily focused on the South West of England and South Wales. It is assumed that HMRC feel that a lot of people have second homes, holiday cottages or rented properties in ths area.  Also parts of these areas will have enjoyed significant growth in houseprices over recent years. The taskforce will be looking for two types of undisclosed profits:- 1) Taxable gains on sales of properties 2) Rental profits The taskforce is likely to review the Lan...

Liechtenstein Disclosure Facility HMRC have announced that the terms of the Liechtenstein Disclosure Facility (LDF) have been amended so as to restrict the availability of the full favourable terms in certain cases. The changes are targeted at users of Employee Benefit Trusts (EBTs) (but could also affect other taxpayers) who have increasingly sought to make disclosures under the LDF owing in part to the favourable terms which reduce the amount payable in connection with the disclosure. Under the new rules, the full favourable terms of the LDF will be restricted where: - No disclosure of new information has been made, - The issue being disclosed is already subject to an intervention that began more than 3 months before the applicatio...

HMRC have launched a new tax disclosure campaign aimed at landlords known as the "Let Property Campaign". In return for making a disclosure under the campaign, taxpayers can expect to receive favourable terms such as reduced penalties. The Let Property Campaign does not have a deadline for making disclosure, however it is expected that in the coming months HMRC will concentrate on identifying those suspected of not declaring rental profits. Therefore those who choose not to participate in the Let Property Campaign or delay making a notification of intent to disclose may face an increased risk of a HMRC enquiry or tax investigation. Who Can Use the Let Property Campaign? The Let Property Campaign is available to all residential land...

See our Spring 2014 Tax Update for more recent cases. The Options & Deadline Imposed by HMRC HMRC have sent letters to approximately 5,000 UK taxpayers with Swiss bank accounts, requesting a response by 28 February 2014. More letters are expected to be sent in the coming months. Those that do not respond by the deadline risk a full tax enquiry. This includes even those that have no UK tax to pay or have previously declared the income to HMRC. Taxpayers in receipt of these letters are offered three alternatives which must be confirmed by signing one of three enclosed certificates: to confirm that they have no outstanding tax to pay in relation to their Swiss bank accounts; that they have used, or intend to use the Liechtenstein...

Users of EFRBS (Employer Financed Retirement Benefit Schemes) have until 31 December 2013 to notify HMRC if they wish to use the EFRBS Settlement Opportunity. The settlement opportunity applies to contributions made by employers in the period 6 April 2006 If employers do take advantage of the settlement opportunity, the settlement should be concluded by 30 June 2014. Under the EFRBS Settlement Opportunity there are two possible routes: 1.  No corporation tax deduction is claimed at the time of the contribution to the EFRBS by the employer.  The deduction will be available for the accounting period in which relevant benefits are paid to the employees. 2. Alternatively, if PAYE and NICs are now applied in a backdated fashion as at the...

Testimonial from Mr AT  “Dear Paul I write in response to your request for feedback. The review that you initially provided of my situation allowed me to understand that it was probably going to be better to make a disclosure under the Liechtenstein Disclosure Facility (LDF) rather than suffer the UK-Swiss Tax Treaty one off levy.  This certainly proved to be the case. Your thorough and robust approach to the calculations and their presentation allowed me to make my disclosure in a confident manner and I was very pleased that HMRC did not enquire into the disclosure. In general, I was delighted with the service and results delivered by Vikki and yourself. Mr AT” The Work  -          Advice comparing the Swiss Tax Tre...

Testimonial from Mr W  “That's great news! Thanks to you and your team for the excellent advice and professionalism handling my case.” The work  -          Comparison of Swiss Tax Treaty and other disclosure methods including the Liechtenstein Disclosure Facility -          Advice on UK tax liability of pension lump sum paid by overseas pension scheme on termination of employment -          Voluntary disclosure to HMRC The Result  -          No UK tax to pay -          HMRC accepted disclosure without query or amendment -          Tax saving of over £47,000 compared to the one off levy under the Swiss Tax Treaty which would have been due in May 2013 had no action been t...

Brief Summary of the Disclosure Facilities The Jersey, Guernsey and Manx disclosure facilities (JDF, GDF and MDF respectively) were introduced earlier this year for taxpayers with undisclosed UK tax liabilities (including income tax, capital gains tax and inheritance tax). Key benefits of the facilities include; reduced rate of penalties (between 10% and 30%) as compared to the normal penalty rates of up to 200% of the tax at stake and a limiting the disclosure period to 1999/00 onwards. Who Can Benefit from the Disclosure Facilities? The types of taxpayers that may benefit the JDF/GDF/MDF fall into two broad categories: 1. Those with undisclosed UK tax liabilities and existing interests in Jersey, Guernsey or the Isle of Man , an...