Voluntary tax disclosures

Disclosures are required for inaccuracies in submitted tax returns or when tax returns have not been filed when they should have been.

There may be favourable penalty treatment where a disclosure is submitted without prompting from HMRC. 

If these discrepancies are noticed by HMRC and any disclosure is prompted by the receipt of letters or notifications from HMRC regarding the issue, any penalties may be higher. 

Making an unprompted disclosure is a beneficial move that could save you from unnecessary financial liabilities. We can guide you through the process of making a voluntary disclosure. 

HMRC now expects most tax disclosures to be made via its online portal, the Digital Disclosure Service (DDS). 

The service is for disclosures relating to:

• Income tax.
• Capital gains tax.
• Inheritance tax.
• Corporation tax.
• National Insurance contributions. 
• Annual tax for enveloped dwellings.

As part of the disclosure, taxpayers are required to self-assess their own exposure to tax, interest and penalties. We can help with self-assessment to ensure no further discrepancies are created and help you navigate the complexities of HMRC’s rules relating to assessment periods. 

Closely associated with the DDS is the Worldwide Disclosure Facility - a channel for taxpayers to disclose offshore tax discrepancies. 

Inaccuracies relating to offshore sources of income and gains are subject to a different penalty and assessment framework, which could potentially result in an increased tax and penalty exposure.

Given the enhanced risks associated with offshore non-compliance, it is crucial to carefully manage a disclosure. We can help you through this complex process, positively influencing the outcome and helping you avoid unnecessary penalties.

HMRC often sends nudge letters to taxpayers whom it suspects have undisclosed income or gains. 

These letters are part of HMRC’s efforts to encourage tax compliance and often include a certificate of tax position. While HMRC’s wording implies that completing the certificate is mandatory, there is no legal obligation for taxpayers to do so. 

It is important for taxpayers to carefully consider whether or not to complete the certificate. In many cases, this may not be the best course of action.  

Receiving a nudge letter can eliminate the option for an unprompted disclosure, potentially leading to less favourable penalties. However, even in this situation, our expertise allows us to guide you through making a prompted disclosure, minimising penalties while ensuring tax compliance.