HMRC has commenced a compliance response to the Pandora Papers by issuing hundreds of letters to individuals named in the released papers requesting that they review their tax affairs and confirm that they are in order.  The Pandora Papers was the biggest release of offshore documents and files by the International Consortium of Investigative Journalists (ICIJ), which comprised 11.9 million leaked documents. The release contained documents from 14 offshore financial service companies. It has taken HMRC some time to sift through the mountain of documents and identify individuals they believe will have additional liabilities to disclose.  It now appears that HMRC is fully prepared and resourced to mount a significant compliance exercise.

WLH understands that the letters issued during the week commencing 5 June 2023 will be the first phase of HMRC’s response and the letter gives the recipient 30 days to check their tax position and explains that penalties of up to 200% on any tax due could be charged. It recommends getting professional advice if the recipient is not sure what to do to correct their UK tax position. It explains that no action needs to be taken if they believe their tax affairs are correct and up to date. The letter also confirms that HMRC may prosecute if there has been dishonest behaviour.

The letters should not be ignored and WLH Tax would recommend that professional advice is taken immediately.

WLH Tax has extensive experience in assisting clients in these circumstances in making disclosures to HMRC. Please contact us for further information and advice.

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