In September 2016, the Worldwide Disclosure Facility (WDF) was launched by HMRC. This provided the opportunity for individuals to voluntary disclose any offshore gains, assets or income. Failure to use this disclosure facility before September 2018 will result in individuals facing 100% penalties for the unpaid tax and in the most serious situations a criminal investigation.
The reasons for disclosure
In accordance with the Common Reporting Standard (CRS), HMRC will receive information about individuals who have gains or offshore income in over 100 different areas. Prior to obtaining this data, HMRC have set up a facility, the WDF to manage the ‘Requirement to Correct'. This is a legal requirement which involves the correction of all unpaid taxes relating to offshore assets prior to September 2018. It is always best to disclose tax issues voluntarily than for them to be investigated by HMRC themselves.
A full disclosure must be made to HMRC within 90 days of notifying them. HMRC will aim to respond to a disclosure within 55 days of it being submitted. A non-UK resident taxpayer will also be eligible if they have to pay taxes in the UK.
Worldwide Disclosure Facility Disclosure Process Explained
During a WDF disclosure, there are several steps that you must follow:
HMRC must be notified of your intention to disclose using the Digital Disclosure Service (DDS)
In the next 90 days the disclosure will have to be prepared along with calculations of the tax that is payable. This will be submitted through the Digital Disclosure Service Facility
When the voluntary disclosure is made, the individual will be required to self assess their activities. This process will determine the penalties that you face and the number of years that the disclosure will cover. The disclosure is usually for four, six or twenty years. This is why it is so important to seek advice early so you can be advised on the most suitable way forward.
How we can help with the disclosure
Churchill Tax Investigation in London can advise clients on whether they need to raise any technical issues which may influence the disclosure such as domicile or residence status because these must be disclosed
The tax payer will also need to declare the maximum amount of assets that they hold outside of the UK covering the last five years. This must include personal goods such as jewellery, investments and cash
When the declaration is made, so too must the payment. Where required a Time to Pay agreement can be reached and this is something else that Churchill Tax Investigation in London can help you with.
In summary we will do the following:
- Take ownership of the voluntary disclosure process
- Advise clients on best possible options for voluntary disclosure
- Communicate with client’s accountants
- Communicate with HMRC
- File the disclosure report
- Agree the amount payable with HMRC including penalties
For further information on our specialist tax investigation services for the Worldwide Disclosure Facility, please contact our friendly, experienced and knowledgeable team for a confidential discussion.