Requirement to Correct – update from HMRC

Sep 10, 2018

The deadline to make a submission under the requirement to correct legislation is now just 20 days away on 30 September 2018. Remember that there are only three very specific cases where the deadline has been extended by HMRC.

Further to our story last month on this legislation, HMRC have provided the following update which reiterates the importance, as already recommended by us, of discussing the RTC legislation with the relevant HMRC contact, especially where the taxpayer has not received any of the letters mentioned:-

“One important point which you may or may not be aware of is that the RTC guidance on gov.uk was updated recently and a small amount of flexibility was introduced around the deadline.  I would encourage anyone with an interest to study the guidance as a whole.  It can be found at: https://www.gov.uk/guidance/requirement-to-correct-tax-due-on-offshore-assets

More specifically there is a new addition within the guidance which reads:

“if HMRC is already undertaking an enquiry into your affairs and on or before 30 September 2018 you inform the person conducting the enquiry that you wish to make a disclosure of offshore tax non-compliance and you then submit an outline disclosure to that person by 29 November 2018, you will not be liable to penalties for the failure to correct any issue detailed in the outline disclosure. The outline disclosure must provide details of the offshore tax non-compliance you have committed; the years involved; a summary of how the non-compliance came about; the amounts of tax that you believe you owe and a summary of the records that are available to help you make your disclosure.”

More generally, I understand that in most cases where an enquiry is under way the caseworker will be writing to the taxpayer to ensure that they are aware of the Requirement to Correct and to inform them of its consequences.  These letters will, where appropriate, include a clear indication of the information that the caseworker considers relevant in that particular situation.  If a taxpayer under enquiry has not received a letter they should certainly contact their caseworker to begin a dialogue about the RTC and what may be necessary to avoid the increased FTC penalties.”