There are now just 100 days to go until the 30 September deadline and the Requirement to Correct (RTC) legislation will come into force.
RTC aims to address any undeclared offshore assets or income and there are tough penalties in store for those taxpayers who do not meet the deadline. Therefore, taxpayers are urged to get their tax affairs in order in the next 100 days, before 30 September 2018.
RTC is a brand new Government legislation and was introduced as part of last year’s Finance Act. It is relevant to all individuals, trustees, partnerships and some non-resident companies who have undeclared offshore tax matters at 5 April 2017.
The deadline is strict and for those who do not declare any offshore tax matters to HMRC – including any income, capital gains or inheritance – penalties will apply at 200% on the shortfall of tax from the offshore non-compliance. Penalties may be reduced to 100% if the taxpayer discloses the non-compliance and co-operates with HMRC, and no penalty will be applied if there is a reasonable excuse or the taxpayer has relied on professional advice which is not disqualified.
In certain circumstances, HMRC can also charge a separate, asset-based penalty and apply a “name and shame” policy for taxpayers who do not comply.
The legislation also covers certain situations where UK income, assets or proceeds of sale are transferred overseas. This is of particular significance to non-UK residents with UK assets.
If you are affected by this legislation change, you might find the following links helpful:
For further information, contact the tax team at Wilkins Kennedy to see how we can help.