HMRC is shortly going to write to non-UK domiciles paying the remittance basis charge, i.e. those non domiciles who pay the flat rate of £30,000 tax charge on the basis that their overseas income is taxed only if it is brought into the UK.
The letter will contain a reminder about the nature of remittances: it seems clear that HMRC believes remittances are under reported, possibly because taxpayers don't understand that remittances include more than simple transfers to a non-UK domicile resident in the UK. Examples of less obvious remittances include payment overseas for goods or services consumed in the UK or gifts made overseas which are then brought onshore.
If you are taxed on the remittance basis and are paying the remittance basis charge, you are likely to receive one of these letters. HMRC says that its main aim is to educate, but also to prompt disclosure. HMRC can go back six years for underpaid tax due to carelessness, 20 years if the underpayment is deliberate, so the numbers can be large and proper advice is needed.
The Revenue’s letter will invite you to call them if you think that you need any help to get the remittance basis right. We think it’s a better plan to call us instead and ask for Clare Munro or Phil Moss.
Tel: +44 (0)20 7490 7766