The Requirement to Correct (‘RTC’) is a statutory obligation for taxpayers with overseas assets to correct any issues with their historic UK tax position.
HMRC have written to all taxpayers who have or who had any offshore financial connections (including those who consider themselves to be non-UK domiciled and/or non-UK resident) to instruct that they review their UK tax affairs to ensure that all tax returns are correct. Additionally, taxpayers should ensure they submitted tax returns for all years for which they owed tax on income or gains.
This includes checking implementation of planning and technical opinions (e.g. that someone is non-UK domiciled are correct) and whether advice taken in the past was refreshed when the law or the client’s circumstances changed. Offshore structures, anti-avoidance legislation and remittances should also be reviewed.
Those who identify errors or failures to submit/notify in the past must rectify the situation before 30 September 2018. Some may decide to submit disclosures where there is doubt over a technical position in order to protect their position against failure to correct sanctions in case HMRC later decides that additional tax is due.
We, along with colleagues in the national and other similar local firms, share a concern that these letters are being sent tout very widely and do not appear at this stage to be promoted by information held by HMRC with the letters being sent to High Net Worth and/or Non-Domiciled individuals in the UK in the hope of promoting a disclosure.
RTC requires those with outstanding offshore tax non-compliance as at 5 April 2017 to correct before 30 September 2018. If correction is not made HMRC will impose punitive penalties for ‘Failure to Correct’ (FTC).
If you are satisfied that you have no further offshore income or capital gains to disclose there is no reason to be concerned but if you do have anything to discuss please get in touch urgently. Contact John Elliot or Sue Stephens.