On 1 February 2016, HMRC took the unusual step of publishing draft regulations through the CIOT (rather than its own) website. The International Tax Compliance (Client Notification) Regulations 2016 and associated draft guidance deal with the client notification requirements referred to in section 222(2)(c), Finance Act 2013. The regulations will require certain financial institutions and “specified relevant persons” (which could include tax advisers/accountants/ lawyers) who have provided offshore advice to clients to write to those clients about the impact of the Common Reporting Standard (CRS) before 30 April 2017. Specifically, advisers are to warn their clients that HMRC will soon be obtaining data on overseas financial accounts; that there are opportunities to make disclosures; and, of the potential danger of penalties (including proposed criminal offences) for non-compliance.
HMRC has said that it will provide standard wording for such notifications.
The consultation period was due to close on 12 February 2016. The Bar Council raised concerns over the broad scope and burdensome nature of the requirements. Others have complained about the costs of compliance and the proposed sanctions for non-compliance.
The intention was for the regulations to come into effect from 6 April 2016, however, the consultation period has been extended to 22 April 2016. The draft regulations and guidance appear to have been removed from the CIOT’s website.
The Bar Council’s summary of the proposals is available to view here.
Any comments on the proposals should be sent to email@example.com