The UK tax authority, HM Revenue and Customs (HMRC), has sent out a new round of “nudge letters” to offshore corporates that own UK property. The letters are intended to encourage these companies to check their UK tax positions and, if necessary, come forward to disclose any undeclared tax.
HMRC has access to a wide range of data on offshore corporates, including information from the Land Registry, Companies House, and the beneficial ownership register. This data has allowed HMRC to identify a number of offshore corporates that appear to be non-compliant with UK tax laws.
The nudge letters are a gentle reminder to these companies that they have a legal obligation to pay UK tax on any profits or gains made from their UK property. The letters also advise companies to seek professional advice if they are unsure of their tax obligations.
HMRC has said that it will take a tough stance on non-compliance. Companies that fail to come forward to disclose undeclared tax could face penalties of up to 200% of the tax owed.
The latest round of nudge letters is part of HMRC’s ongoing campaign to crack down on tax avoidance and evasion. The authority has been particularly focused on offshore corporates in recent years, as these entities are often used to hide assets and income from the taxman.
By targeting offshore corporates, HMRC is sending a clear message that it will not tolerate those who try to cheat the system.
If you are an offshore corporate that owns UK property, you should take the time to review your UK tax position. If you have any concerns, you should seek professional advice.
The consequences of non-compliance with UK tax laws can be severe. Companies that fail to declare undeclared tax could face penalties of up to 200% of the tax owed. They could also be subject to criminal prosecution.
In addition, non-compliance can damage a company’s reputation and make it difficult to do business in the UK.
If you have received a nudge letter from HMRC, you should take it seriously. The letter is a reminder of your legal obligation to pay UK tax on any profits or gains made from your UK property.
You should carefully review the letter, contact HMRC if you have any questions and you may also want to seek professional advice,
Our team of tax lawyers can advise and assist you, by acting now, you can avoid the serious consequences of non-compliance.