The ‘Requirement to Correct’ is a new statutory obligation originally scheduled to be introduced in Finance Bill 2017, but delayed due to the snap election. It provides that taxpayers should review their offshore interests and correct any UK tax irregularities by disclosing the relevant information to HMRC.
Liabilities in respect of income tax, capital gains tax and inheritance tax are all within the scope of RTC and non-compliance includes any circumstance in which tax has been underpaid, so it does not just apply to deliberate tax evasion.
Failure to carry out the necessary correction on or by 30 September 2018 will render taxpayers liable to a new penalty as a result of their ‘‘failure to correct’’ (FTC). This end date of 30 September 2018 deliberately corresponds with the date by which all countries committed to the OECD’s Common Reporting Standard will be exchanging data.
We expect this piece of legislation to be introduced, relatively unchanged in one of the forthcoming finance bills this year.