The number of tax evasion cases identified by HMRC for the 2017/18 year was 3,809 – an 18% rise on 3,216 in 2016/17. It is likely this development has something to do with the Revenue’s extensive new data collection powers under the Common Reporting Standard (CRS).
Under CRS, businesses in participating countries must share certain information about their foreign-resident clients and customers with the authorities. The ever-increasing sources of data to which HMRC has access are effectively helping it to uncover more and more cases of non-compliance. To illustrate this point, HMRC’s specialist investigation department (the offshore, corporate and wealthy unit) has opened 839 investigations into UK taxpayers with assets in offshore tax havens over the past year. The message is clear that for those with extensive offshore arrangements, it is particularly important to review these to make sure that they remain compliant.
Self employed face big tax bills
HMRC has quietly extended a deadline for tens of thousands of contractors and self-employed people facing bankruptcy to settle their tax affairs. Approximately 50,000 people face penalties relating to the use of complex tax avoidance arrangements that were popular in the early 2000s. The arrangements, which usually involved loans and offshore trusts, were widely accepted to be a legitimate way to reduce income tax and were used by many contractors in the IT and healthcare sectors. Glasgow Rangers Football Club used similar schemes to pay players and managers. Those who used the arrangements now face a “loan charge” in April next year unless they settle their affairs with the taxman. The charge could be much higher than the original tax bill as the loans will be rolled into one and taxed in one year.
Later in life lending on the rise
Lending in later life is on the increase as people live and work for longer, retire later and the cost of living continues to increase. More solutions are needed but older borrowers have been benefiting in the form of retirement interest-only (RIO) loans. These loans differ from other mortgages targeted at older people as RIO loans do not have any upper age limit. This means the borrower does not need to have any form of repayment plan set up alongside the mortgage, the property is simply sold when they die or move into long term care. The City watchdog, the Financial Conduct Authority, gave mortgage lenders permission to offer RIO to customers earlier this year. Older buy-to-let landlords seeking safe ways to generate income, in particular, could benefit from these solutions.
Financial Advice Including Pension Advice, Bristol
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