Monday 18 December 2017

Revenue targeting UK pensions in crackdown

Finance Minister Michael Noonan announced tax plan in October
Finance Minister Michael Noonan announced tax plan in October

Charlie Weston Personal Finance Editor

TAX officials have sent letters to 500,000 taxpayers warning them that they are running out of time to tell Revenue if they have foreign earnings that they have failed to declare.

The warning also relates to a bank account abroad or a pension from outside the state that they are not paying tax on.

It comes after Revenue got access to records held on Irish-based taxpayers by tax authorities in other countries.

Thousands of people living here get pensions from Britain from their time working there, with some of these not declared for tax purposes.

The move comes after Finance Minister Michael Noonan announced in October's Budget a move to target offshore income and assets which have not been declared to Revenue.

Mainly targeted at large-scale tax evaders, the clampdown is also likely to impact anyone with a bank account in another country or a property that is being rented out, even for part of the year.

"Offshore does not just mean assets or funds held in exotic locations and includes any income or assets held outside Ireland, for example a UK pension or rental income from a holiday home overseas," said the president of the Irish Tax Institute, Mark Barrett.

Anyone affected has been advised to seek financial advice.

Revenue said taxpayers are being advised that from May 1 changes are coming into effect for anyone filing a "qualifying disclosure" that relates to offshore matters.

This relates to a tax liability or omission in a previous filing. It can concern property, funds or accounts held abroad.

"A qualifying disclosure allows errant taxpayers to avail of lower penalties on back tax owed as well as avoiding publication of their details in the quarterly tax defaulters' list and possible criminal prosecution," Revenue said.

Changes in the 2016 Finance Act mean the qualifying disclosure option will not be available for people who have failed to declare offshore assets by April 30.

Mr Barrett said severe penalties will apply to taxpayers who have not declared or have under-declared their offshore income and assets to Revenue by the end of April.

There is no minimum threshold on the level of income or assets held overseas that must be declared.

Revenue is writing to thousands of self-assessed tax payers this week to invite them to review their tax affairs and consider whether they need to make a disclosure to Revenue and pay any underpaid tax, interest and penalties, Mr Barrett added.

The disclosure regime applies to all taxpayers including individuals, corporates and trusts.

This year, Revenue will start to receive bank and other financial account information from over 100 countries globally.

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