PAYE liability involving offshore matters – updated guidance on voluntary disclosure

HMRC has recently published updated guidance on how to make a voluntary disclosure, the guidance includes details on how lost tax involving an offshore matter can affect the number of years that should be disclosed to HMRC.

A 12-year time limit is applied to income tax and PAYE where the lost tax involves an offshore matter, an assessment can be carried out to recover any under-assessed or over-paid tax up to 12 years of the end of the relevant tax year.

The limit cannot apply to years before 2013/14 where the income tax lost involves an offshore matter, however a 20-year limit continues to apply where tax was under assessed or under-declared deliberately.

The limit does not apply where HMRC has received all relevant overseas information from which they could be expected to become aware of any lost tax or if it was reasonable to expect HMRC to have raised an assessment before the normal time limits expired.

An offshore matter is defined as below:

Income arising from a source in territory outside of the UK
Income or assets received in a territory outside of the UK
Activities carried on wholly or mainly in a territory outside the UK
Anything having effect as if it were income, assets or activities of a kind described above.

Any questions, please do reach out to your BDO representative.

Andrew Bailey
andrew.bailey@bdo.co.uk