This client came to us on recommendation from another firm of accountants in London. The client had substantial undeclared income for several years and was intending to fully declare to HMRC but was quite nervous about the idea and repercussions from HMRC. We made a disclosure using the Contractual Disclosure Facility or Code of Practice 9 route offered by HMRC. Through this we were able to ensure that our client is not prosecuted and also the penalties are kept to a minimal level. The client was very pleased with the outcome.
Our analysis: We have had a number of clients that have undeclared income and want to come forward. The conventional approach is to file tax returns for a number of years which can lead to immediate penalty charges and a significant chance of a formal tax investigation being opened with possible prosecution by HMRC if the case is significant. This can be costly, stressful and time consuming. A disclosure through the Contractual Disclosure Facility or Code of Practice 9 allows one to make a more cost effective and efficient disclosure providing a level of immunity from prosecution. This is a specialized and technical area and firms with experience of these types of disclosures should be used.