EXTRA PENALTIES FOR NOT REPORTING OVERSEAS INCOME
Are you declaring any sources of financial income overseas? This could be overseas property, shares, businesses, cash income or anything else providing you with a financial gain.
Why are we asking?
We’d like you to know HMRC will soon be dramatically increasing its penalties for failing to disclose overseas income or financial gains. And because of advancements in technology, it’s now much easier for HMRC to find out about any overseas activity. They’re increasingly interacting with tax authorities, banks and other government and financial institutions all over the world.
Also, we know it can be relatively easy to overlook overseas income, and particularly relatively small amounts. Some people also presume that because tax has been paid overseas, you don’t have a UK tax liability or UK reporting requirement. Unfortunately, this isn’t the case.
From 1 October 2018, the minimum penalty will increase to 100% of the liability. And in the most serious cases, could potentially be up to 200% plus 10% of the value of the assets.
Late payment interest will also be charged by HMRC. So, as you can see, in some cases the tax, interest, and penalties could exceed the amount of income itself.
If this has got you thinking
There’s a process available called the Worldwide Disclosure Facility, which can be used to correct your tax position before the increased penalties come in. As well as avoiding the increased penalties, the very fact you’re making a voluntary disclosure should help to reduce the current penalty rates too.
If you’d like to find out more about this, please get in touch.
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