HMRC has continued to review the data from the Pandora Papers and a further tranche of letters is being issued from 8 April. These letters will include an extended response time of 60 days.
The Chartered Institute of Taxation (CIOT) has reported another update on HMRC's activity concerning the Pandora Papers, the release of offshore data by the International Consortium of Investigative Journalists which involved 11.9 million leaked documents published in 2021 from 14 offshore financial service companies.
- HMRC are writing to those they suspect have undisclosed tax liabilities and will identify the overseas entities in the letter.
- A dedicated team has been set up to deal with queries.
- There are six variations of the letter being issued: - the letters vary with domicile status.
- Penalties can be up to 200% of any tax due.
- The Contractual Disclosure Facility should be used where deliberate behaviour or fraud is suspected because this route can give the taxpayer protection from criminal prosecution for tax offences.
- For non-deliberate offshore non-compliance, a method such as the Worldwide Disclosure Facility could be used.
- Making disclosures of tax fraud and deliberate behaviour to HMRC is a specialist area and assistance from a tax dispute specialist is recommended.
Useful guides on this topic
Penalties: Offshore Income, CGT & IHT Penalties
What penalties apply for errors and failures relating to offshore Income and Capital Gains Tax (CGT)?
Contractual Disclosure Facility (CDF)
What is HMRC's Contractual Disclosure Facility (CDF)? How does it work? What must taxpayers do under the CDF?
Worldwide Disclosure Facility
HMRC's Worldwide Disclosure Facility (WDF) opened on 5 September 2016. It allows the disclosure of a UK tax liability relating wholly or partly to an offshore issue.
External link
Pandora Papers - HMRC Compliance Activity (April 2024)
HMRC Letter variations. Letter 1; Letter 2; Letter 3; Letter 4; Letter 5; and Letter 6
