HMRC have issued updated guidance on the Requirement to Correct (RTC) legislation which sets out the different levels of mitigation for penalties for failure to correct and extends the deadline by 90 days in some circumstances.

The purpose of the RTC legislation is to require those with undeclared offshore tax liabilities (relating to Income Tax, Capital Gains Tax or Inheritance Tax for the relevant periods) to disclose those to HMRC on or before 30 September 2018.

Extended deadline

HMRC have now said that they will not charge penalties where they have not received all information by the 30 September 2018 deadline, to anyone who:

  • Was registered to use the Worldwide Disclosure Facility by 30 September 2018 and makes the disclosure by 29 December 2018.
  • Where HMRC are already enquiring into their affairs, informs HMRC by 30 September that they wish to make a disclosure of offshore tax non-compliance and submits an outline disclosure by 29 November 2018.
  • Informs HMRC by 30 September 2018 that they wish to make a disclosure of deliberate behaviour involving offshore tax non-compliance via HMRC’s Contractual Disclosure Facility (CDF) process.

Penalties for failure to correct

HMRC have also clarified that:

  • If the disclosure is not voluntary the minimum penalty level will be increased from 100% to 150% of the tax not corrected.
  • The level of penalty mitigation they will offer will depend on how much assistance is given to by the taxpayer:
    • For telling: up to 30% of the maximum available reduction will be given
    • For helping: up to 40% of the maximum available reduction
    • For giving access to records: up to 30% of the maximum available reduction.

If you need assistance in disclosing undeclared offshore tax liabilities, contact the Virtual Tax Partner support team. 


Requirement to Correct

Penalties: Offshore Income, CGT & IHT

Worldwide Disclosure Facility


Requirement to Correct tax due on offshore assets


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