News Alert – Pandora Papers

We understand that HMRC have begun to issue letters to taxpayers following their review of the information contained in the Pandora Papers.

The Pandora Papers comprise an enormous volume of data (some 11.9 million documents) leaked to the International Consortium of Investigative Journalists (ICIJ) which was sourced from 14 different offshore service providers. The data spans a period from the 1970’s through to 2020. HMRC have initially written to taxpayers because their names have been identified as linked to documents in the Pandora Papers. The letters ask taxpayers to check their tax position and make a disclosure where appropriate. The letter does not specify the route by which a disclosure should be made and there are a variety of options available. The tax issues which may arise here are complex and penalties can be significant. In the event that Requirement to Correct penalties apply, the penalties can be as much as 200% of the tax liability. HMRC are devoting significant resource to their compliance efforts in this area. Affected individuals will need to take great care in assessing their potential exposure and deciding how to proceed. HMRC’s letters ask for a response within 30 days which, given the potential complexity involved in dealing with historic offshore tax liabilities, is likely to prove a challenging timescale. We have extensive experience in dealing with disclosures and investigations involving historic offshore tax liabilities. If your clients receive a letter from HMRC, or if they believe they may be the subject of HMRC investigation in connection with offshore tax matters, we are therefore well-placed to assist them in assessing the available options. We are happy to have an initial no-obligation consultation with any affected clients who might find that helpful.