Common Reporting Standard (CRS)

HMRC’s latest drive against tax evasion has placed the onus on tax professionals to write to clients, forwarding a copy of a letter from HMRC. As we were threatened with a £3,000 fine if we failed to comply with the requirement, we felt duty bound to reluctantly send the message to all clients who we provide personal advice to.

HMRC’s motives are to make people aware that the CRS will provide them with access to new information about income and assets owned by UK resident individuals in various other countries. HMRC will use this information to check offshore income has been correctly declared and any UK tax owed, assessed and paid.

Anyone who has been disclosing details of all their income clearly has nothing to worry about. At the risk of pointing out the obvious, investments held in the Channel Islands and the Isle of Man are considered to be held overseas.

It would also be advisable to ensure income derived from Euro or Dollar accounts is reported on tax returns, even if only very modest amounts are received. This is because if HMRC receive notification that a person has an offshore account but is not disclosing overseas income, then HMRC may consider that an investigation could be cost effective – so ensure you do not provide HMRC with a reason to initiate an invasive investigation!

 If you have any questions on this subject then you can get in touch with your usual contact in the office or you can use the website contact form!