The Requirement to Correct (RTC) regime at Schedule 18 of Finance (No 2) Act 2017 charges significant penalties for any tax due if any offshore tax non-compliance that is outstanding on 05/04/2017, is not corrected by 30 September 2018. The starting point for such Failure to Correct (FTC) penalties is 200% of the tax due and this will apply not only to any actual omissions or inaccuracies (regardless of the reasons) but also to any judgemental matters which are subsequently conceded (for example a domicile issue).
This new penalty regime only requires that the offshore tax non-compliance is not corrected by 30th September, there is no requirement that any errors or failures were known about on 30th September 2018.
If such non-compliance is not corrected by 30th September 2018 the only way to avoid any resulting penalties is if the individual can satisfy HMRC that there was a reasonable excuse for the failure to correct.
Some taxpayers will have been alerted by HMRC to the RTC regime by specific RTC letters and this could impact on whether such an individual has a reasonable excuse for not correcting any inaccuracies that are later identified.
To the extent that they have not already done so taxpayers may wish to consider, before 30th September, whether they have any outstanding offshore non-compliance and to ensure that they have a record of them deciding that no correction is necessary, or alternatively making any necessary corrections before the deadline.
