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Assessment and penalties for undisclosed tax liabilities

30 March 2021 / Naomi Wells
Issue: 4786 / Categories: Comment & Analysis
Let’s clarify

Key points

  • HMRC can assess previously underpaid income tax and CGT within different timescales depending on the circumstances and taxpayer’s conduct.
  • The requirement to correct legislation introduced extended time limits for offshore tax non-compliance which can now be assessed up to 5 April 2021.
  • HMRC also have a permanent extension to the time limits for offshore matters and transfers.
  • In order for the inaccuracy of a submission to lead to a penalty it has to be careless or deliberate.
  • The maximum rate for a failure to correct penalty is 200% of the offshore potential lost revenue.

The past few years have seen a raft of new measures to extend HMRC’s ability to recover previously undisclosed tax liabilities and to assess related penalties. Many of these provisions overlap and attempting to chart a course through the legislation presents a challenging task.

This article looks at where we are now specifically...

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