Our Services

UK Tax Compliance

While most taxpayers in the UK are fully taxed at source (via PAYE) and are not strictly required to file a tax return to claim ‘spilt year treatment’ if leaving the UK part-way through a tax year, in some cases it can be advantageous to voluntarily submit a tax return where the (non) residence circumstances may not be clear-cut.

Filing a return allows the taxpayer to present their precise situation to HMRC and provide a degree of certainty that a non-resident claim will not be challenged by HMRC after the amendment window (12 months after filing in most cases) has closed.

Capital Gains Tax Reporting

Since April 2020, any sale of UK property will potentially give rise to a HMRC reporting requirement, either within 30 or 60 days of the sale depending on when completion occured. Payment of any capital gains tax is also due within the same timeframe.

This obligation applies even if the seller is within the Self Assessment system and would be required to report the same gain on their annual UK tax return.

While the sale of the ‘only or main residence’ will, in most cases, qualify for full tax relief (and be exempt from the reporting requirement if UK resident), there are a number of circumstances in which this relief is restricted, particularly where the owners have spent time abroad.

Moreover, HMRC have recently removed the relief for periods when the property was let; this now only applies where the owners were co-resident with the tenant(s).

Non UK-residents have been required to report UK property sales since April 2015, and are likely to have a UK capital gain to report in respect of their former UK home.

We offer an efficient and affordable service to calculate and report any capital gains on UK property sales.

Residence & Domicile Advice

 

Since April 2013, the UK tax residence system has been governed by the Statutory Residence Test (SRT).  This new set of rules provided the taxpayer with legal certainty in almost all scenarios at the expense of much greater complexity compared with the earlier system. 

Generally, most taxpayers will now require professional advice to navigate the system and plan for contingencies, particularly the restrictions on international movement resulting from the Covid-19 pandemic.

Domicile

UK non-domiciliaries (non-doms) can still enjoy considerable tax advantages while UK resident, however HMRC are increasingly likely to challenge the domicile status of  foreign nationals residing long term in the UK even before ‘deemed-domicile’ status applies (typically in the 16th year of residence).

UK outbound expats seeking to lose their UK 'domicile of origin’ in favour of a ‘domicile of choice’ elsewhere in the world, often to escape the relatively punitive UK inheritance tax net, face an uphill struggle to convince HMRC of the ‘permanence of their adopted home country.

Seeking early advice is therefore vital in securing the benefits of remaining or becoming non-domiciled in the UK.

HMRC Investigations

 

HMRC normally has a 12 month window from the date you file your tax return to open an ‘enquiry’.  This window is extended if you have amended your tax return or it was submitted late.

Every year, HMRC open thousands of enquiries to ensure a specific tax return or claim therein is correct or to check that income or capital gains have been reported correctly.  Another reason is to discourage evasion and ensure public confidence in the fair operation of the tax system; for this reason, some enquiries are made on a random basis.

Responding to an enquiry can be very time consuming and stressful for you, with no recovery of costs available even if the enquiry is closed with no change to the tax return.

For this reason, many clients choose to take out insurance to cover the cost of professional fees incurred during a HMRC investigation.

HMRC Discovery Assessments

HMRC also have additional powers outside of the enquiry window if they discover information that was unavailable to them during the original period or can prove that the tax return was carelessly or deliberately inaccurate. These investigations are known as ‘discovery assessments’ and can be raised up to four, six, or twenty years after the end of relevant tax year depending on HMRC’s view of the taxpayer’s culpability in giving rise to the alleged inaccuracy.

Offshore Matters

In recent years HMRC has been awareded various additional powers (in terms of penalties, time limits, and ‘strict liability’ offences) to investigate matters where there is an offshore aspect, however marginal.  In these cases, seeking early professional assistance is vital as the recent legislation provides little sympathy to taxpayers even in cases where most would agree that an innocent mistake was made.

Serious Civil Tax Investigations (COP 8 and COP 9)

Where more serious inaccuracies and/or significant quantities of underpaid tax are suspected, HMRC can employ ‘Code of Practice’ procedures (known as COP8 and COP9 depending on the perceived seriousness of the matter) which are conducted by the Fraud Investigation Service (FIS).  These types of investigation are generally more intrusive and require careful management and specialist advice.

How we can assist

We have a great deal of experience in handling all manner of HMRC investigations and we can help manage the process on your behalf, ensuring you have minimal contact with HMRC wherever possible.

In our experience, a taxpayer with professional representation is likely to reach a more favourable enquiry outcome than they would without.   The outcome of an enquiry will often depend on knowing your rights as a taxpayer and having the right technical expertise to ensure the correct interpretation of the law is applied to your circumstances.

During this process we will defend your position, assert your statutory rights and, where appropriate, negotiate the best possible settlement for you, including interest, surcharges and penalties, where tax is due as a result.

We always engage constructively and cooperatively with HMRC as this invariably produces the best outcome for our clients.

Depending on the circumstances of each case, we can assist as follows:

  • Dealing with tax enquiries & discovery assessments raised into the tax affairs of individuals, partnerships, companies, offshore trusts or onshore trusts;

  • Providing specialist advice to accountants, lawyers, agents and other professionals;

  • Negotiating tax penalties with a view to achieving maximum mitigation;

  • Providing advice in relation to the tax tribunal system, along with representation in the First Tier Tribunal;

  • Resolving conflicts with HMRC and advising on the complaints & appeals process if appropriate;

  • Preparing reports and submissions for voluntary disclosures to HMRC, including under favourable regimes (‘amnesties’) as and when they become available;

  • Preparing disclosure reports as required under Code of Practice 9, in cases where serious tax fraud is suspected;

  • Managing tax investigations being conducted under Code of Practice 8, in serious tax avoidance cases.

Pre-arrival Planning

 

Individuals arriving in the UK, either foreign nationals (‘non-doms’) or Britons returning after a long period of residence abroad, should be aware of various tax planning measures which would protect them from unnecessary liabilities or allow them to secure the benefits of being non-domiciled.

For international mobile executives, the UK tax system can offer inbound expats the opportunity to considerably reduce their UK tax liability by reference to their workdays spent outside the UK (Overseas Workday Relief) or to claim generous tax relief in respect of their accommodation costs where the UK engagement is expected to last no more than two years (Temporary Workplace Relief).

In both cases, very careful financial planning is required, ideally several months before the individual becomes officially UK tax-resident.

Much the same is true for non-doms seeking to benefit more generally from the remittance basis.  Recommended measures include foreign account segregation (i.e. maintaining separate accounts for ‘post-residence’ income and capital gains) and detailed planning on what level on expenditure will be required in the UK to fund the intended lifestyle.

Consideration should also be giving to selling assets pregnant with a ‘paper gain’ before UK tax residence officially begins - subject naturally to tax rates in the home country and ordinary commercial factors - to prevent any gain potentially falling within the UK tax net.