The Chartered Institute of Taxation (CIOT) has reported that HMRC’s Wealthy team is targeting taxpayers who may owe the remittance basis charge (RBC) for the 2022/23 tax year. Specifically, letters are being sent to individuals who:
- Have been UK tax residents for 7 out of the last 9 years, requiring them to pay a £30,000 charge.
- Have been UK tax residents for 12 out of the last 14 years, requiring them to pay a £60,000 charge.
These letters instruct recipients to either:
- Amend their tax returns to reflect the RBC payment, or
- Switch to the arising basis of taxation, where worldwide income and gains are taxed in the UK.
They must take action within 60 days of receiving the letter. If they fail to correct any inaccuracies in their tax return, they could face prompted disclosure penalties, along with additional tax liabilities and interest.
The remittance basis is typically used by non-domiciled UK residents to limit UK tax liability to income and gains remitted to the UK, while the arising basis taxes worldwide income. This effort by HMRC aims to ensure taxpayers comply with their obligations regarding RBC.
If you need any assistance with the above, please contact us at info@veragroupltd.com or call 0207 4346000
.