Tax Advisers Face £3K Fine For Not Issuing HMRC Threat

Tax advisers have less than 30 days to avoid a £3,000 penalty from HMRC by complying with a little known new legislation imposed by HMRC.

The FT Adviser reports that a notice published in September 2016 stated financial advisers, accountants and solicitors with UK resident clients who have an account with offshore money or assets in it, should send a letter provided by HMRC to those clients.

Advisers who do not send this letter by 31 August 2017 could be subject to a £3,000 tax penalty.

The letter, which demands UK residents bring their tax affairs up to date, states “the tax world is becoming more transparent” and closes with the threat, “come to us before we come to you”.
If you’re classed as a ‘specified financial institution’ or ‘specified relevant person’ - which includes financial advisers - you may need to send the notification letter to clients who are UK tax resident.

The criteria for this are, if you’ve provided them with financial advice or services, provided them with an overseas account, referred them for an overseas account or referred them for advice or services overseas.

According to HMRC website, the covering letter must include your usual branding, your client’s name and address on set text.

If you’re a financial institution the set text must say:

“Financial institutions in more than 100 jurisdictions around the world are being legally required to find out the tax residence of their account holders and report details of their accounts, structures, trusts, and investments to be exchanged with the appropriate tax authorities.

As a UK tax resident, any overseas accounts you have will be sent to HM Revenue & Customs (HMRC). This gives HMRC unprecedented levels of information to check that, as in most cases, the right tax has been paid.

If you have already declared all of your past and present income or gains to HMRC, including from overseas, you do not need to worry. But if you are in any doubt, HMRC recommends that you read the factsheet attached to help you decide now what to do next.”

A spokesperson for HMRC said:

"The new legislation was designed to make people aware that HMRC will soon be getting data about offshore accounts from over 100 jurisdictions; there’s a disclosure facility, and penalties and other sanctions are going to get worse so come forward now.

It’s being sent by tax advisers and financial institutions because – at the moment - they know more about who is likely to get reported to HMRC. It’s right that these industries play their part in raising awareness on automatic exchange."

Call me old fashioned, but I think it's a tad unpleasant that HMRC use others to issue threats on its behalf!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"