Over the last few months you may have heard people talking about the importance of declaring your income, using terms such as the Common Reporting Standard. Whether it's an issue you have decided to tackle head on, or something you have chosen to ignore, HMRC is not making any exceptions.
As of 1 September, HMRC will begin to receive information of overseas financial accounts and portfolios held by all UK residents. This includes countries previously used by people wishing to have anonymity such as the British Virgin Islands, Cayman Islands, Liechtenstein, Luxembourg and Mauritius.
Simply put, if you have been earning money and not declaring it in the form of a tax return, time has run out.
HMRC will also be implementing new anti-avoidance legislation called "requirement to correct" (RTC). This will enable HMRC to charge a penalty to anyone who at the end of 2016/17 has any relevant offshore non-tax compliance to correct, including income tax, capital gains and inheritance tax.
Individuals failing to correct historical tax irregularities from offshore accounts and investments may face penalties of up to three times the amount of unpaid tax.
So what does this mean for you?
The silver lining is that there is still time to get your tax affairs in order and if you meet the requirements of the Seafarers Earnings Deduction (SED) you will be able to declare your undeclared income and backdate your tax returns without penalty, and without having to pay any tax.
While there is time, speak to an adviser who can help you to become tax compliant.
If you would like more information or would like to knos if you qualify for the SED, contact us today: