A specialist taxation team from Crowe Clark Whitehill has delivered a seminar on changes to compliance and disclosure obligations coming into force to combat tax evasion and protect the integrity of tax systems adopted by the 34 member states of the Organisation for Economic Cooperation and Development, of which the Isle of Man is one.
Presented by the firm’s Richard Bull, Ian Shirley and Sean Wakeman to an audience of accounting practitioners, the seminar focused on three areas: Common Reporting Standard (CRS), Worldwide Disclosure Facility and Requirement to Correct.
CRS, the new information gathering and reporting requirement, largely follows the FATCA (Foreign Account Tax Compliance Act) model adopted by the United States and involves the collation and reporting of financial details of clients tax resident in countries that have undertaken to exchange information to the relevant national tax authority in accordance with CRS.
Such information must be reported annually to the national tax authority, (in the case of the Isle of Man, the Assessor of Income Tax), the first reporting date being June 30, 2017. The Isle of Man Assessor of Income Tax will then have until 30 September 2017 to submit the information to HM Revenue & Customs (HMRC) or whichever tax authority of the country in which the client is resident for tax purposes.
The Worldwide Disclosure Facility was introduced by HMRC to offer individuals a final opportunity to come forward and put their tax affairs in order before information reported under CRS becomes effective. The facility was introduced on September 5, 2016 and will run until September 30, 2017.
With HMRC and other tax authorities across the world adopting a tougher approach to offshore tax evasion, new sanctions under the Requirement to Correct obligation will be introduced from September 30, 2018. Tax disclosures will still be able to be made, but the penalties levied are likely to be substantial.
Crowe Clark Whitehill director Phaedra Bird said: ‘We were very grateful to Ian, Richard and Sean for their comprehensive explanation of the increasingly complex reporting and disclosure obligations required by HMRC for clients with offshore assets. The seminar was informative and served as an important “call to action” for taxation professionals in light of the changes coming into force over the next 12 months.
‘Tax compliance has never been more critical. Crowe Clark Whitehill can help clients with international tax affairs to navigate the complexities of managing compliance and disclosure so that they are able to enjoy a robust and transparent relationship with HMRC and other tax authorities worldwide.’
Sean Wakeman of Crowe Clark Whitehill LLP’s London office, who organised and spoke at the event said:
“We were delighted that so many corporate and trust services providers attended our event. Our message is simple but vitally important:
Practitioners need to tell their clients about the Common Reporting Standard, the Requirement to Correct and the Worldwide Disclosure Facility now, so that any disclosures that need to be made to the UK authorities can be submitted before the extremely harsh ‘failure to correct’ penalties take effect”.
To find out more call 627335 or visit crowecw.im.
If anyone feels that they have a client who needs to make a disclosure to HMRC or for more advice on the subjects covered, Mr Wakeman can be contacted on +44 (0)20 7842 7100.
