Global transparency and exchange of information has been the hot topic for a while in the tax world and with three key milestones in September we have created a calendar of important dates for your diary.
5 September 2017: HMRC Worldwide Disclosure Facility opens as part of the Requirement to Correct regime
Following on from disclosures facilities introduced by Liechtenstein and Jersey, the UK have announced their own disclosure facility.
This is to give taxpayers an opportunity to disclose a UK tax liability that relates wholly or partly to offshore income or assets, in advance of the receipt of CRS data.
The taxpayer can notify HMRC of an irregularity in their tax affairs from 5 September and then has 90 days to repot the tax disclosure, calculate the interest and pay any penalties. An individual or their agent can make the disclosure.
Penalties can range between 100-200% of the tax liability. Penalties are likely to be reduced if the disclosure is made promptly.
The facility will run until 30 September 2018.
30 September 2017: First exchange of Common Reporting Standard ‘CRS’ data
The first reporting under the OECD’s Common Reporting Standard (CRS) was completed this year in respect of 2016 data. Individuals who have an interest in an offshore trust or company and are resident in a CRS jurisdiction will be reported. In total,102 jurisdictions have committed to implementing CRS.
The 30 September is the deadline for which tax authorities in 49 CRS jurisdictions are required to exchange the information received in reports to the relevant tax authority.
30 September 2017: Corporate Criminal Offence of Failure to Prevent Facilitation of Evasion introduced
The Criminal Finances Bill was introduced in October 2016 and takes effect this month. It applies to companies, partnerships and LLPs.
Criminal tax evasion enabled by an agent or an organisations’ employees, which the organisation failed to prevent, will constitute a criminal offence and the business will face an unlimited fine if convicted.
The key defence for the organisation is that reasonable steps were taken to prevent such criminality. Reasonable procedures suggested by HMRC as: risk assessments, due diligence, training of staff, reviews and commitment from top level management to create a culture where tax evasion is never acceptable.
5 December 2017: UK trust registration deadline
Trustees must register any new or existing trusts that have a UK tax exposure for the 2016/17 tax year. Tax reviews will have to be performed annually to verify whether trusts need to register year on year. The UK tax exposure includes income tax, capital gains tax, inheritance tax and stamp duty land tax.
Although 5 October 2017 is the official deadline, HMRC have confirmed no penalties will arise for registrations after 5 October but before 5 December.
30 September 2018: Second exchange of CRS data
More information will be reported in this round of exchange as more jurisdictions have signed up to report in respect of 2017 data.
As at 12 September 2017, an additional 53 jurisdictions have signed up to report in 2018 compared to 2017.
1 October 2018: Failure to Correct regime introduced
Tougher sanctions will be introduced following the Requirement to Correct regime.
For taxpayers who do not make use of the HMRC Worldwide Disclosure Facility, penalties will be higher for disclosures made after 1 October 2018. The failure to correct penalties are up to 300% of the tax liability.
If you have any questions about any of the deadlines, the information that should be provided or want to check that you have sufficient procedures in place to deal with the increased compliance, please contact our team: