The British High Commission has advised British citizens to report and pay their tax on foreign income and assets. In a media release, the Commission said as part of the British Government’s “Requirement to Correct” legislation UK taxpayers must make sure that all their foreign income and assets, where there might be tax to pay, have been declared to HMRC before 30 September 2018.
“From 1 October 2018, new, substantially higher penalties will apply for those who have failed to pay all the tax due on foreign income and assets,” the Commission warned. “The vast majority of people and businesses pay the right amount of tax. The requirement to correct legislation is aimed at those who fail to pay tax on their offshore income or assets.”
The Commission said many people might not realise that some straightforward actions, such as renting out a property in South Africa or transferring income and assets from one country to another, could mean having to pay tax in the UK.
“This includes having income from an asset in South Africa or anywhere else in the world. These must all be declared to HMRC.
“HMRC is therefore urging people to check they have paid the right tax on their offshore assets, before tougher penalties are introduced from 1 October 2018.”
Although the Requirement to Correct applied to people who pay tax in the UK, it could still affect people if they lived abroad and paid tax outside the UK, for example people who rent out their UK home while living in South Africa or another country.
The Commission advises those concerned that they haven’t told HMRC about foreign income assets, or who have transferred income abroad without paying the UK tax on it, that they should make a disclosure to HMRC before 30 September 2018.
“You could also consider taking independent professional advice before deciding what to do next.”