We are aware that during the week commencing 8 April 2024, HMRC wrote to a number of wealthy individuals, about whom they hold information in respect of the Pandora papers, giving them 60 days to respond. If you received one of these letters and you require assistance, please contact us below.

HMRC are running a campaign encouraging taxpayers to check their UK returns

The massive amounts of data from the Pandora Papers are now being reviewed by HMRC.

HMRC are now contacting UK resident taxpayers named in the documents encouraging them to review their tax affairs and ensure they have correctly disclosed their tax liabilities.

Hundreds of people are anticipated to be contacted during this initial round of the campaign.

The ‘Pandora Papers’, published in 2021 by the International Consortium of Investigative Journalists, is a collection of almost 12 million documents revealing the use of offshore structures in low or no tax jurisdictions by wealthy individuals.

Anyone who has received a letter from HMRC is advised to seek specialist advice at the earliest opportunity.

Given the use of offshore centres and structures which HMRC believes are commonly associated with tax evasion, along with allegations of hidden assets, tax avoidance and corruption against individuals named in the documents, HMRC is naturally extremely interested and has established a dedicated team for this campaign, and will likely escalate investigations into individual taxpayers if prompt action is not taken within 30 days of receiving the letter.

HMRC’s letter indicates that penalties of up to 200% of any underpaid tax liabilities may be charged, under the ‘Failure to Correct’ penalty regime for offshore tax matters, and warns taxpayers that they may face prosecution or criminal action if their tax affairs indicate dishonest or fraudulent behaviour.

In such cases a disclosure under the Contractual Disclosure Facility (CDF), also known as Code of Practice 9 (COP9) should be made, as this is the only disclosure route which secures immunity from prosecution in exchange for a full disclosure of all deliberate and non-deliberate tax irregularities. Where irregularities do not involve fraudulent behaviour, alternative routes such as the Worldwide Disclosure Facility (WDF) for disclosures of offshore tax matters may be more appropriate.

How we can help

Crowe’s Tax Resolutions team have vast experience in dealing with tax disputes and disclosures and can advise on the best route forward. We can also handle any disclosure matters alongside your existing advisor or accountant. Even if you have not received a letter but are concerned about your tax affairs, specialist advice is recommended and coming forward voluntarily before HMRC has a chance to write to you will put you in a more favourable position.

Penalties for tax irregularities may be mitigated by early disclosure and full co-operation during the disclosure process. Even if there are no tax issues to disclose, early dialogue with HMRC will help to prevent further queries.

What is in the papers?

The documents involve 14 offshore financial services providers who specialise in incorporating Trusts, companies and other structures to hold individuals’ income and assets. These providers are often based in low tax jurisdictions seen as having lower levels of transparency and governance. The documents have already implicated high-profile individuals including influential politicians and businesspersons, and it is the largest release of such information following the Panama and Paradise Papers in 2016 and 2017.

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