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Receiving a letter from HMRC can be an unsettling experience, especially when it pertains to your overseas assets, income, or gains. This type of correspondence indicates that HMRC has identified potential discrepancies in your tax filings related to your international financial interests. In this blog, we will explain what this letter means, why you might have received it, and the steps you should take to address it.
Understanding the Letter
The purpose of the letter is to encourage taxpayers to come forward and correct any errors or omissions in their tax declarations related to overseas assets, income, or gains. The letter typically outlines the nature of the potential issue, requests further information, and provides a deadline for response. A common phrase you might find in the letter is, "We have information which shows you may have received overseas income or gains that you may have to pay UK tax on." This indicates that HMRC has identified income or assets that may not have been properly reported on your tax returns.
The letter might also explain the source of this information: "We have received this information through the UK's tax information exchange agreements with other countries." These agreements allow HMRC to gather data from a variety of international sources, including foreign tax authorities, financial institutions, and other third parties.
Immediate Actions to Take
If you receive such a letter, it’s important not to panic, but to act promptly. First, gather and review all relevant documentation related to your overseas assets, income, and gains. This includes bank statements, investment records, and property documents. Next, seek professional advice. Consulting with a tax professional experienced in international tax matters and HMRC’s Worldwide Disclosure Facility can help you understand the specifics of your situation and determine the best course of action. Tax Dispute Experts can guide you through the Worldwide Disclosure Facility process.
Responding to the Letter
With the support of your adviser, promptly gather all necessary documentation related to your overseas assets, income, and gains to ensure complete and accurate information is provided to HMRC. Your adviser will help prepare a thorough response and guide you through making a disclosure via HMRC's Worldwide Disclosure Facility. Adhering to the specified deadline is crucial to avoid additional penalties or enforcement actions, and your adviser will ensure timely submission of all necessary documents and responses.
Potential Outcomes
Using an adviser, like Tax Dispute Experts, can significantly improve your chances of achieving a more favourable outcome when dealing with HMRC. If discrepancies are found, HMRC may impose penalties and interest on the unpaid tax, but these can often be mitigated through proactive and cooperative behaviour facilitated by your adviser. Should you owe a significant amount of tax, your adviser can negotiate payment plan options with HMRC to manage your financial obligations effectively.
How We Can Help
Tax Dispute Experts provide expert guidance on how to respond to HMRC's letter and navigate the Worldwide Disclosure Facility process. We assist in gathering and reviewing the necessary documentation to ensure accuracy and completeness. We also handle all communications with HMRC on your behalf, ensuring that your responses are timely and effective. We understand how HMRC works, its powers and how to deal with them when the pressure is on.
Contact Us
Need assistance with an HMRC enquiry? Contact us today to speak with our Tax Dispute Experts and protect your interests.