A4.575AA Increased penalties for defaults involving offshore matters and transfers—future changes
With effect from a date to be announced, the territory classification system at A4.575A and the accompanying penalties are to be amended to reflect advances in international tax transparency through the implementation of the Common Reporting Standard (CRS) (see A6.1206). The amendments were introduced by Finance Act 2015, Sch 20, but as at 1 January 2020 no date has yet been given for their coming into force. The changes are as follows:
A new Category 0 is to be introduced, with the same penalty levels as the current Category 1. Some of the territories currently in Category 1 will be transferred to the new Category 0; it is anticipated that only territories making arrangements with the UK that meet the CRS will be transferred. As is currently the case for Category 1, the penalty levels for Category 0 will be the same for defaults involving an offshore matter or offshore transfer as they are for defaults involving a domestic matter.
At the same time, Category 1 will be revised so as to increase the penalty levels currently applicable to that category. The territories in revised Category 1 will be those currently in that category that are not