HMRC Worldwide Disclosure Facility
On 5 September 2016, HMRC announced the launch of a Worldwide Disclosure facility. This is not intended to be a descendant of the Liechtenstein Disclosure Facility (LDF) which closed in December 2015, but is an opportunity for taxpayers to regularise their tax affairs in advance of the Common Reporting Standard (CRS) which will be effective from 30 September 2018.
The CRS in an International initiative whereby over 100 countries have undertaken to exchange Tax payer information on a multilateral basis.
Who does this apply to?
Any UK or non-resident individual or organisation that has a UK Tax liability originating from overseas or the UK, but was then subsequently moved abroad.
What Taxes does this relates to?
All direct Taxes (including Inheritance Tax) going back 20 years. VAT is not included in the facility.
What are the benefits of using this facility?
Disclosure under the WDF is considered voluntary and therefore the penalties are lower than those applied as a result of an HMRC enquiry, also HMRC tend not to pursue criminal prosecutions where a voluntary disclosure is made, although there is no guarantee on this.
In addition to this, information exchange under the terms of the CRS will commence on in May 2017 and Tax payers who have not made a disclosure by September 2018, but HMRC are in receipt of overseas information in connection with their tax affairs can expect to be vigorously pursued.
What are the consequences of non-disclosure?
Non-disclosure prior to 30 September 2018 may mean significantly higher penalties or potentially a criminal prosecution.
How do I make a disclosure?
Taxpayers must register through the online portal for this facility, however it is important that individual circumstances are reviewed and considered prior to registering, particularly where there are also onshore/other complex Tax issues.
We would be happy to discuss any Tax issue on an initial no obligation basis. Please feel free to contact us if you have any such queries.