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 are not making any more exceptions.
Come 1st 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 find 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 and will include income tax, capital gains and inheritance tax. Individuals failing to correct historical tax irregularities from offshore accounts and investments can face penalties of up to three times the unpaid tax.
So what does this mean for you? The silver lining is that there is still time to get your tax affairs up to date and 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 not only without penalty, but without having to pay any tax on your income.
The best thing to do is to act while you can and speak to an adviser who can help you to become tax compliant. If you would like more information or to find out if you qualify for the SED contact us today: