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No Safe Havens 2019

HMRC recognises that the majority of customers pay the right tax at the right time and are committed to helping them do so as easily as possible. However, some make mistakes, or fail to get up-to-date advice and become non-compliant. Others are not aware that they should, for example, account for income from a rental property in another jurisdiction and that UK tax may be due.

Some engage in tax avoidance by seeking to exploit the tax rules to gain an advantage that Parliament never intended. A minority deliberately decide to evade UK tax, for example using offshore structures to hide income that they should have declared.

Global implementation of new international tax transparency standards is shedding unprecedented light on HMRC’s customers’ overseas arrangements. For example, early analysis of the information HMRC received last year suggests around one in 10 UK taxpayers have an offshore financial interest.

No Safe Havens 2019 brings together in one place HMRC’s approach towards offshore tax compliance. It covers a range of behaviours, from simple mistakes to avoidance and evasion.

The strategy sets out how HMRC ensure offshore tax compliance and tailor their approach, helping customers get it right first time where possible.

This is a compliance strategy to ensure everybody abides by the rules that Parliament sets. When HMRC intervene, they will use an approach that is appropriate and proportionate to the tax at risk and the customer’s behaviour to ensure rules are appropriate and do not lead to unfair outcomes.

Mel Stride MP, Financial Secretary to the Treasury:

“HMRC’s priority remains to promote compliance by making it easy for taxpayers to get their tax right first time, ensuring that individuals who want to do the right thing receive a service that is tailored to their circumstances.

HMRC will continue to crack down hard on those who try to avoid or evade paying the tax they owe, as well as those who help them, by investing in the latest technology and using its tough new penalties.

As this strategy sets out, the UK will continue to champion international tax transparency. HMRC will continue to help those who try to get it right and tackle those who go overseas in an attempt to pay less than they should”

Since 2010, HMRC has raised over £2.9 billion by tackling offshore tax non-compliance, enough to build 6 new hospitals and their investigations have protected £3.3 billion in tax revenues, including both onshore and offshore, in 2017 to 2018 alone. This current portfolio of civil and criminal investigations resulting from the Panama Papers is forecast to yield over £190 million.

The HMRC have stated “If a customer takes ‘reasonable care’ [doing everything a person can reasonably do to make sure they comply with the tax rules] but despite that gets their tax wrong, then no penalty will be due for that mistake.

Those who have failed to take reasonable care and have understated the tax due will be required to pay the appropriate penalties. These penalties can be reduced if the customer comes forward to correct their mistake and cooperates with HMRC’s enquiries”.

Do you have any queries regarding your investments overseas? If so, please contact us now.

Tel: 01303 230453