Worldwide Disclosure Facility
The Worldwide Disclosure Facility was introduced in September 2016. It provides an opportunity for anyone residing within the UK or abroad to bring their tax records up to date by disclosing undeclared income and paying the correct amount of tax.
Over 100 countries have sent financial information to HMRC under Common Reporting Standard (CRS) agreement. This has meant that HMRC are more capable to trace and detect undeclared offshore income and gains.
As part of the Worldwide Disclosure Facility, Requirement to Correct (RTC) rules were introduced. These required taxpayers with undeclared offshore income and gains to make a disclosure by 30 September 2018 and not being able to do so would be seen as a Failure to Correct (FTC). Disclosures submitted after this date would face penalties in the region of 100% to 200% of the unpaid tax.
You will be in a much better position and get more favourable terms from HMRC if you come forward and disclose before being prompted to do so by HMRC.
Can you use the Worldwide Disclosure Facility?
The Worldwide Disclosure Facility is suitable for individuals with undeclared offshore income or gains that are subject to UK tax. Amongst other things, unpaid tax on the following is also included:
- Undeclared income earned from offshore territories
- Offshore activities
- Offshore assets
You will be in a much better position and get more favourable terms from HMRC if you come forward and disclose before being prompted to do so.
Whether you are prompted by HMRC or intending to make an unprompted disclosure, going through the Worldwide Disclosure Facility involves several steps.
You start by making a submission to HMRC confirming your intention to disclose. This notification is submitted through HMRC’s Digital Disclosure Service (DDS).
This will be followed by a letter from HMRC acknowledging your submission and setting a 90-day deadline for you to submit and finalise the disclosure.
This can be extremely complicated and challenging as HMRC expect you to come forward with a complete and accurate disclosure of underdeclared income/gains, associated tax & interest due and also assess the correct level of penalties.
To arrive at the correct level of penalties, you need to self-assess behaviour that resulted in failure to disclose. This along with the jurisdiction will determine the level of penalties applicable. These factors will also be relevant in deciding the number of years to be included within the disclosure.
It is very important to offer full cooperation and submit an accurate disclosure. This can be useful in negotiating lower penalties. Failure to submit an accurate disclosure can have serious consequences which includes higher penalties, fraud investigation or having your name published.
Therefore, it is important to appoint a specialist who has expertise, knowledge and experience of handling this process.
How we can assist
Here at Morris Wheeler Churchill, we have a specialist team of Senior Ex-HMRC officers and Chartered Tax Advisers with extensive experience of handling disclosure under Worldwide Disclosure Facility.
Our team has helped a large number of clients in making disclosures through the Worldwide Disclosure Facility. All of the disclosures submitted by our firm have been accepted by HMRC and our specialist team has used their knowledge and expertise to achieve the best result for our clients.
There can be occasions where certain technical issues (i.e. residence or domicile status) can have an effect on the disclosure you make. Our specialist team can review the situation and advise on the best course of action.
When the final disclosure is submitted to HMRC, the taxpayer is required to pay the outstanding tax liability. If you are not in a position to pay this in full, our team can liaise with HMRC and agree a Time to Pay arrangement that is affordable for you.
Our specialist team can help in every aspect of making a disclosure through Worldwide Disclosure Facility. We can take ownership of the whole process from beginning to end. This will include the following:
- Review of circumstances and advice on the best option for disclosure
- Submission of the initial notification
- Handling all communication with HMRC
- Liaising with accountants (where needed)
- Preparing and filing the final disclosure report
- Calculating and agreeing liabilities (including penalties) with HMRC
If you have received a letter from HMRC or are considering making a voluntary disclosure through the Worldwide Disclosure Facility, please contact us on 01279 464400 for a confidential discussion.