HMRC Letters For Offshore Criminal Offences

Steadily, HMRC are sending out letters regarding potential offshore criminal offences, following the receipt of information from other jurisdictions. They read broadly as follows:

“We have information that shows you may have received overseas income or gains that you have to pay UK tax on. We have received this information through the UK’s tax information exchange agreements with other countries.

It is your responsibility to tell us about your UK tax liabilities from offshore income or gains from anywhere in the world.

It is important that you check you have told us about all your UK tax liabilities. Most people already do this. Some people with assets overseas have found that changes to their personal circumstances or to tax laws, mean that earlier tax advice is out of date.”

The issues include the potential exposure to the automatic offshore criminal offence that does not require ‘intent’ but instead just that a tax return is incorrect. Along with the incorrect return are penalties of potentially up to 200%. Worryingly for professionals involved, there is the risk of them also being penalised where they have ‘enabled’ offshore tax evasion!

The prudent approach for those with offshore interests is to have them reviewed to ensure tax compliance and to be aware of any risks. Seeking secondary advice can assist to secure a reasonable excuse argument in the event of a future HMRC challenge. Offshore criminal offences will not apply where there is a reasonable excuse and any potential exposure to penalties will be significantly reduced. 

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