Helping taxpayers with offshore tax and international tax debt

In the first submission, we discuss how and why unrepresented taxpayers can easily assume – mistakenly – that their offshore income is not taxable in the UK.

HMRC are considering using data received from overseas jurisdictions to prompt these taxpayers so that they declare their offshore income to HMRC. We point out that prompts alone are not enough, and that HMRC should think more widely about how they can provide better guidance and assistance to unrepresented taxpayers so that they report their offshore income accurately.

The second discussion document focuses on how HMRC can reduce the figure for ‘international’ tax debt. This refers to debt which has some international angle to it, such as where UK residents have liability on overseas assets, or non-UK residents who have a liability on UK assets or from before they left the UK.

We highlight that these categories require different solutions, but in all cases tax debt should always be checked to see whether it is both correct and in time to assess before it is collected. For those leaving the UK, we suggest how departure notifications can be improved and what action HMRC could take to mitigate late-filing penalties being issued where Self Assessment records have not been closed down prior to departure.

The discussion documents can be found here:

Helping taxpayers get offshore tax right

Preventing and collecting international tax debt

Our responses can be found here:

LITRG response: Helping taxpayers get offshore tax right

LITRG response: Preventing and collecting international tax debt