KPMG has warned offshore fund investors to check their tax reporting before the UK’s department of revenue and customs (HMRC) does.
According to the firm, HMRC is paying extra attention to check tax reporting is done right. The consequences of getting it wrong can be severe and fall on the end investor rather than their adviser or fund manager.
Iona Martin, tax director at KPMG UK, said: “Offshore fund investing is a complex bit of the tax system and even if people have filed their reports the same way for years without any issues, it doesn’t mean they’ve been doing it correctly.”
She added: “HMRC is now on red alert and is using all powers available to it where taxpayers have been getting it wrong,” said.
If an investor is found to have misreported, HMRC may be able to look back as far as the 2011/12 tax year and potentially charge penalties of up to 200% of the tax owed, according to KPMG.
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