UK taxman offers no quarter to offshore asset holders

HMRC allowed relief to all taxpayers affected by coronavirus but not those with assets abroad

|

HM Revenue and Customs (HMRC) has rolled out several measures to help people with outbreak of covid-19, ranging from extended deadlines for information to suspending enquiries. 

But this is not the case for those with offshore assets. 

The taxman said it will not be granting any extension or relief measure to taxpayers who have been sent letters asking for further details on their assets, income and gains.  

The move has been deemed somewhat discriminatory considering that everyone, regardless of the location of their assets, is being hit by the coronavirus pandemic. 

Under pressure 

Fiona Fernie, tax risk and dispute resolution partner at tax and advisory firm Blick Rothenberg, said: “It seems extraordinary that, at a time when other taxpayers are being offered the chance to temporarily suspend enquiries or delay responses to HMRC’s questions, those with offshore assets are still being put under pressure and are expected to request further time to produce information if they are struggling.   

“Not only is it likely that the current circumstances will make it more difficult for taxpayers to obtain the relevant details to answer HMRC’s questions, many taxpayers will find the need to ask for an extension of time a very stressful process, when they already have more than enough anxiety to deal with. 

“It also seems somewhat strange that HMRC are pursuing these lines of enquiry, which in our experience often result in taxpayers demonstrating to HMRC that their UK tax affairs are fully compliant, rather than dedicating available resources to completing longstanding open enquiries, particularly in cases where they already been provided with a significant amount of information,” she added 

Worth the time? 

Fernie also doesn’t think HMRC will be able to justify the resources used to recoup whatever sum is due in tax; and she believes that offshore asset holders are being treated differently and more harshly than any other taxpayer. 

“HMRC should be sensitive to the difficulties which many taxpayers are experiencing during the current pandemic, but in the majority of cases already under enquiry, it would be beneficial for both the taxpayers and HMRC to progress the enquiries to a conclusion.   

Although not all of those enquiries will yield any significant amount of tax, I question whether these ‘offshore’ letters will produce enough tax to be worth HMRC dedicating resources to this initiative rather than to the normal enquiry process.” 

She added: “I am also concerned that those with offshore assets, income and gains will feel that they are being singled out for harsher treatment than other taxpayers.  

“In recent years, there has been a whole raft of legislation which appears to penalise those with offshore interests and many such taxpayers will consider this to be another attempt to focus attention on them unfairly.” 

MORE ARTICLES ON