UNITED KINGDOM

Global Employer Services Newsletter March 2020

HMRC ramping up use of cross border data sharing

Governments and authorities sharing information across international borders is not a new phenomenon. This is especially true in relation to individuals’ personal tax affairs and their visa and immigration status. In fact, the EU implemented their first Directive on Administrative Cooperation (DAC) with effect from January 2013 and the latest, DAC6, applies from July 2020 with retroactive application back to July 2018. The direction of travel has been clear for some time with focus also being placed on the wider tax landscape such as country by country reporting and Base Erosion and Profit Shifting (BEPS) coming under review over the same period.

In terms of HMRC activity, we are now seeing action as a result of this increased sharing of personal data between countries. They are reviewing reports of foreign investments and income held offshore for UK based tax payers and comparing this to information declared on UK tax returns.  Where there is a discrepancy, taxpayers are being contacted to advise of this and the fact HMRC will be checking the UK tax filings going back for up to four years.  In certain circumstances the checks can actually reach further back than this. 

Any tax payers who have offshore income/gains or investments (including pension funds) should review their UK tax filings to ensure these accurately reflect the tax position. The appropriate action needs to be taken where UK tax filings may need to be revised or brought up to date. 

Andrew Bailey
andrew.bailey@bdo.co.uk