Lexis®Library update: The Society agrees that the use of offshore data to inform HMRC’s communications and prompts to taxpayers, and particularly to agents, could promote compliance but advises caution where data is incomplete or misleading.
The discussion document focuses on how HMRC could:
- use data in different ways to help taxpayers get their offshore tax right
- better support taxpayers with their offshore tax obligations
- work with agents and intermediaries to help promote offshore tax compliance amongst taxpayers
The Law Society considers how HMRC might collect and use data and carry out its communications and compliance work effectively in order to support taxpayers in relation to their offshore tax obligations.
Key response points include:
- using offshore data has the potential to help taxpayers get their offshore tax right, but HMRC should consider the risks associated with incomplete or misleading data
- although it could be helpful for HMRC to inform a taxpayer’s tax adviser that the taxpayer has offshore assets, issues around taxpayer confidentiality (for example, where the taxpayer uses different advisers for advice and compliance) and agent authorisation would need to be considered
- appropriate prompts for taxpayers, including on tax returns themselves, could be helpful
- invitations could be provided to prompted taxpayers to contact HMRC along with links to relevant information
- in deciding whether more information about sources of income, amounts and payment dates should be required of taxpayers, consideration should be given to minimising any consequent additional compliance burden (for example, by including a de minimis threshold)
- an awareness campaign may be a good idea in the context of offshore tax, as well as dedicated information tailored to common scenarios
See Simon’s Taxes: A4.576
Source: HMRC discussion document on helping taxpayers get offshore tax right – Law Society response
This content was first published by LNB News / Lexis®Library, a LexisNexis® company, on 16 June 2021 and is published with permission. Further information can be found at: www.lexisnexis.co.uk.
