The Common Reporting Standard (CRS) means that financial institutions such as banks and trust companies now automatically report their clients’ interests in offshore assets to the ‘home’ tax authority.
As a result, HMRC now has with an unprecedented level of data regarding UK individuals with interests in assets overseas.
The FT notes that there are many years’ worth of data to plough through, so HMRC must do this quickly and efficiently (said without irony), otherwise there is a danger that much of this information will never be analysed and opportunities will be lost.
Following receipt of this data, HMRC has been writing to tens of thousands of taxpayers, asking them to sign a formal document certifying whether their tax affairs are in order or whether they need rectifying.
The certificates highlight that there is a risk of prosecution if taxpayers “make a false statement or complete a false certificate”, which leaves people open to possible criminal investigation if an error is later found in their tax history, even if such an error arose because of oversight rather than something more sinister.
Note well what the FT says:
Despite these letters being sent and received, there is actually no statutory requirement to sign the certificates, or even to reply to HMRC at all.
That said, the letters should not be ignored.
Caveat being that you would be wise to take professional advice.
Tax does have to be taxing.
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