Voluntary Disclosure
TAX ADVISER & ACCOUNTANT | HMRC AUTHORISED AGENT | COMPANIES HOUSE ACSP
London | Serving individuals and companies in the UK and overseas
25+ Years' Experience | ICO Registered | HMRC AML Supervised
Income that was not declared, a gain that was not reported or an error in a past return does not disappear with time. HMRC receives financial data from banks, online platforms and more than 100 jurisdictions. A disclosure made before HMRC opens a check is treated more favourably than one made in response to it.
Correcting past tax positions before HMRC raises them
What determines your position
Timing affects the penalty. A disclosure is unprompted where it is made before HMRC has reason to believe it is about to discover the matter. An unprompted disclosure attracts a lower minimum penalty than a prompted one.
Behaviour determines the range. Penalties depend on whether the inaccuracy was careless, deliberate, or deliberate and concealed. The quality of the disclosure, including how fully it is explained and evidenced, reduces the penalty within that range.
Time limits follow behaviour. HMRC can generally assess four years; six years for careless errors; up to twenty years for deliberate inaccuracies; and up to twelve years for certain offshore matters.
Interest runs from the original due date. Late payment interest accrues on each year's tax from the date it was due until it is paid.
Disclosure follows a formal route. UK matters are disclosed through the Digital Disclosure Service and offshore matters through the Worldwide Disclosure Facility. Once HMRC is notified, the disclosure and payment must usually follow within 90 days.
Overseas tax is taken into account. Where tax has already been paid abroad on the same income or gain, foreign tax credit relief may reduce the UK liability.
Information is already shared. Under the Common Reporting Standard, HMRC receives details of accounts held abroad by UK residents. Matters it holds data on are more likely to be raised by HMRC first.
Voluntary disclosures, nudge letters and offshore matters form part of the practice's HMRC work. Each disclosure is prepared on the evidence, with the liability calculated before anything is submitted. All matters are handled in confidence.
The disclosures we handle
Undeclared UK income
Rental, self-employment and investment income not reported in past returns. We establish the years concerned, calculate the liability and prepare the disclosure.
Offshore income and assets
Foreign accounts, property and investment income. Disclosure through the Worldwide Disclosure Facility, with foreign tax credit relief considered.
Unreported capital gains
Disposals of UK and overseas property or shares that were not reported. We calculate the gain, reliefs available and the tax due for each year.
Cryptoasset
gains
Gains and income from cryptoassets not included in past returns, disclosed through the Digital Disclosure Service.
Nudge
letters
Letters asking a taxpayer to review their tax affairs. We establish whether anything needs to be disclosed and how the response should be framed.
Errors by previous agents
Returns filed incorrectly by another adviser. We identify the errors, correct the position and address the penalty exposure.
From review to settlement
01
SUBMISSION
Provide details of the income, gains and years concerned.
02
REVIEW
Sources, records, residence position and time limits are examined.
03
WRITTEN OPINION & TERMS
A written opinion sets out the behaviour category, the likely liability, the disclosure route, and the scope and fees of the work.
04
DISCLOSURE
HMRC is notified and the disclosure, with full calculations, is submitted within the required period.
05
SETTLEMENT
The offer and payment are agreed with HMRC, which either accepts the disclosure or opens a check.
