Offshore disclosure query ....

[Jester]

Hi

I was an IT contractor between the years of 1994 and 2000. During that time I accumulated some funds which I kept in an offshore account(s). On returning to the UK I left the money in these accounts and started employment in the UK for tax year 2000/20001. Since then no payments have been made into the offshore accounts although money has been taken out and repatriated into the UK.

I received the letter from HMRC two days ago and am now extremely worried. I accept the fact that I am liable for the interest accrued during the time I have been living in the UK and intend to pay that plus interest plus the 10% penalty - no questions there. It was ignorance on my part and I realise I am bang to rights on that.

However, what really concerns me is the details HRMC now have on me. If I am correct Barclays gave HMRC the following information :

Opening Balance for all active accounts : Feb 2000
Closing Balance for all active accounts : March 2005
All transations an all active accounts for the following periods :

Jul 2000, Feb 2001, Mar 2002, Dec 2003, Aug 2004

Therefore they know how much money I had offshore in Feb 2000 - when I was not working in the UK. I did fill out a P85 when I left the UK and received an NT tax code. I did not, however, fill out a P86 when I returned to the UK - I just went straight back into the tax system and no question were asked. Now close on 7 years down the line I am worried they're going to ask me the source of the income that has generated the interest I am having to pay tax on. I don't have any documentary evidence that can prove I was non resident.

The fact that I was given an NT Tax code in 1994 - does that apply till such times a P86 is returned? And because of the fact I didn't complete a P86 - will the start of my employment count as the time I become tax resident in the UK again?

Any advice will be greatly appreciated. I am extremely worried about this situation as, I am sure, a number of people are.

[King Cnvt]

You are just the sort of taxpayer NL and the HMRC loves to punish.

Hard working, solvent, scared, and confused.

[Jester]

You are just the sort of taxpayer NL and the HMRC loves to punish.

Hard working, solvent, scared, and confused.

Yeah - but I am going to seek advice on this one mate. Don't think I'm just going to go straight to HMRC with arms aloft saying "it's a fair cop guv". At this point, I'm just looking for clarity on the residency status bit.

Also, from what I gather - if I do make some sort of disclosure, only on the interest earned whilst I was resident in the UK (which, as I said, I accept I am liable for) then chances are it'll get accepted regardless because the clowns at HRMC will be up to their armpits investigating the people who didn't bother to take up the facility. What was the last word on take-up? Something like 25,000 out of 400,000 letters sent?

[Nemo]

Offshore Tax - Guidlines

I am in a similar position - i worked for 16 months abroad in Europe & some of the money i earned was paid offshore. During the period i thought i was non resident & my management co put this on my uk tax return - however i did not complete a full tax year from April to April.

My offshore bank has handed all my details to HMRC & i am afraid that i will be getting a large tax bill on the full amount & not the interest.

Does anyone know if you can claim partial non residency for the time you were working out of the UK ?

Can anyone recommend a good tax specialist ?

[Jester]

I am in a similar position - i worked for 16 months abroad in Europe & some of the money i earned was paid offshore. During the period i thought i was non resident & my management co put this on my uk tax return - however i did not complete a full tax year from April to April.

My offshore bank has handed all my details to HMRC & i am afraid that i will be getting a large tax bill on the full amount & not the interest.

Does anyone know if you can claim partial non residency for the time you were working out of the UK ?

Can anyone recommend a good tax specialist ?

I know an excellent guy but he's Glasgow based. PM me if you want the details.

[tim123]

on. I don't have any documentary evidence that can prove I was non resident..

Why can you not prove that you were not resident in the UK, Were you not resident somewhere else, with a job contract, a rental contract and perhaps even a local registration.

Or did you trash all this stuff?

tim

[tim123]

I am in a similar position - i worked for 16 months abroad in Europe & some of the money i earned was paid offshore. During the period i thought i was non resident & my management co put this on my uk tax return - however i did not complete a full tax year from April to April.

My offshore bank has handed all my details to HMRC & i am afraid that i will be getting a large tax bill on the full amount & not the interest.

It seems like you will.

Does anyone know if you can claim partial non residency for the time you were working out of the UK ?

No, all you can claim is double taxation relief for the tax that you paid on the same income in the foreign country.

Can anyone recommend a good tax specialist ?

To work out your liability, or to get you off?

tiom

[Jester]

Why can you not prove that you were not resident in the UK, Were you not resident somewhere else, with a job contract, a rental contract and perhaps even a local registration.

Or did you trash all this stuff?

tim

In a word, yes, I did. Although I suppose I could go to the agencies I was conrtacting with and see if they have my contracts on file. But I can't see them keeping stuff over 13 years old.

[ASB]

Surely they can only generally go back 6 years?

Since nothing has been paid in other than interest since you came back to the UK surely the question of where did the income come from is not relevant.

To go back more than 6 years they have to be able to establish fraud, that seems a bit agressive for an amnesty. Further they should have the records of the NT tax code the R85 has triggered.

[Jester]

Surely they can only generally go back 6 years?

Since nothing has been paid in other than interest since you came back to the UK surely the question of where did the income come from is not relevant.

To go back more than 6 years they have to be able to establish fraud, that seems a bit agressive for an amnesty. Further they should have the records of the NT tax code the R85 has triggered.

That's what I thought too as did my accountant and he's had experience in this field too. He's got a few "big fish" out the mire on more than one occasion so I'm guessing he knows what he's talking about. Until I make the disclosure though, who knows how the HMRC are going to react? Too busy chasing the people who chose not to notify probably - tomorrow's the deadline and only something like 25,000 out of a possible 400,000 have chosen to take up the facility!