HMRC cracks down on hidden foreign income

Pedro Gonçalves
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HMRC cracks down on hidden foreign income

HMRC has doubled down on its campaign against taxpayers with undeclared foreign income.

Thousands of taxpayers have received letters in the past month urging them to review their foreign assets and bank accounts, warning that false declarations could result in criminal prosecutions, the FT reported.

It follows a trend that started last year as thousands of letters were dispatched by HMRC.

We have information that shows you have an interest in overseas property or received overseas income or gains that you may have to pay UK tax on"

The UK tax authority is seeking to close the country's tax gap, which stands at 5.6% of tax liabilities according to HMRC's estimate for 2017/18, equating to around £35bn.

The HMRC letter, seen by the Financial Times, said: "We have information that shows you have an interest in overseas property or received overseas income or gains that you may have to pay UK tax on.

"We have received this information through the UK's tax information exchange agreements with other countries." The letter asks the recipient to respond quickly — a letter dated February 24 sets a deadline of March 25.

Last year it was revealed that HMRC had raised more than £2.9bn since 2010 by tackling offshore tax non-compliance.

However, tax accountants have criticised HMRC for not carrying out proper checks on the individuals whose names appeared on CRS lists before sending the letters, with few cases resulting in extra disclosures being required.

HMRC denied the suggestion that the letters were being dispatched without proper checks on an individual's position, including their tax returns. "We do not send our letters speculatively," it told the paper.

 

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