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CIOT critical of extending offshore assessment time limits

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The CIOT believes the government has not adequately made its case for extending minimum assessment time limits to 12 years where offshore matters are involved. In its response to HMRC’s consultation on the change, intended to take effect from April 2019, the institute warns of ‘unfairness for taxpayers and perverse incentives toward the care taken with tax returns’.

At Autumn Budget 2017, the government announced that it intends to increase the assessment time limit for cases of mistakes or non-deliberate offshore tax non-compliance to at least 12 years after the end of the relevant tax year or relevant period. Where there is deliberate non-compliant behaviour, the current time limit of 20 years will remain, whether offshore matters are involved or not.

HMRC’s consultation, ‘Extension of offshore time limits’, closed on 14 May. The CIOT says in its submission to HMRC that there is no evidential explanation for the rationale behind the measure and calls on the tax authority to publish analysis to support it.

John Cullinane, CIOT tax policy director, called it ‘perverse that this proposal comes at a time when HMRC has access to a bigger armoury to deal with offshore non-compliance than at any time in the past’, as exchange of information agreements provide large amounts of taxpayer data from overseas jurisdictions.

The CIOT suggests applying extended time limits only to offshore matters involving ‘high risk’ jurisdictions which attract a ‘category 3’ territory classification.

Applying a 12 year time limit, even where a taxpayer has taken reasonable care with their tax affairs, ‘does not strike the right balance between the public interest in collecting the right amount of tax, and the right of taxpayers to finality in their tax position after a reasonable period of time’, the institute said. See

The Association of Taxation Technicians (ATT), in its response to the consultation, recommends including a safeguard to ensure the extended 12 year period only applies in situations where it is needed in order for HMRC to gather the relevant information. This would require HMRC to notify a taxpayer of its intention to apply the 12 year provision, giving the taxpayer the opportunity to appeal. See

Issue: 1399
Categories: News