How to take advantage of HMRC disclosure facilities?

There are many reasons why you might need to make a voluntary disclosure to the HMRC, and these are usually associated with undisclosed taxable income. 

It might be that you have made mistakes with your taxes and need to amend mistakes made to remain compliant. Or you may have evaded your tax obligations purposefully, perhaps due to financial issues. These are just two reasons, but there could be others.

If you suspect or know full well that you haven’t paid enough tax, the HMRC may already be onto you. They could impose a penalty on you, or in more serious cases of tax evasion, you might be considered suitable for criminal prosecution. Needless to say, both scenarios need to be avoided. 

To alleviate the consequences of unpaid taxes, the HMRC have provided a number of disclosure facilities for taxpayers. These include the Let Property Campaign (LPC) for landlords and the Worldwide Disclosure Facility (WDF) for UK taxes that are due for any income related to offshore matters.

Why Should I Disclose To The HMRC?

If you know you owe tax to the HMRC, you could keep quiet about it. However, as we stated above, there are risks, so this is never advised. If you don’t disclose sources of taxable income, an investigation could be started by the HMRC, and you may find yourself in a lot of trouble.

When mistakes are made, honesty is always the best policy. The same applies when you know you have purposefully omitted to mention anything the HMRC needs to know. When you come forward voluntarily and disclose unpaid taxes, your case will be dealt with in a more lenient fashion. 

This is why taxman have set up HMRC disclosure facilities. They are there to be used by any taxpayer who has failed to meet their tax obligations. When you use a disclosure facility, your case will be settled via civil means and not through criminal prosecution. 

You will need to ensure that your disclosure is honest, of course, as you shouldn’t leave out vital information. You will be expected to settle for the tax you owe (including interest and a potential penalty), but you will avoid any further charges that the HMRC could have imposed upon you. 

How Do I Take Advantage Of HMRC Disclosure Facilities?

In the first instance, you could contact the HMRC directly. They will give you information regarding the disclosure process and the facilities that are recommended for your particular case. 

Alternatively, it may be in your best interests to work with a tax expert. They will discuss your taxes with you, including those that have been undisclosed. And they will check for any further tax issues, such as anything that you may have missed within your calculations. Using a tax expert is often the safest option as you will be given advice and support that can minimise the penalties that may be imposed upon you. 

What Happens When I Use A Tax Expert?

When looking for a tax expert, you need to look no further than the team at Tax Accountant. We offer a wide range of accounting and tax services, including those that are related to HMRC disclosure facilities. 

We will discuss your case with you and then make contact with HMRC on your behalf. After notifying them of the intent to make the disclosure, we will then prepare the disclosure with you and gather all the facts that relate to your undisclosed taxable income. 

An integral part of the disclosure process is the ‘offer letter.’ This is where you offer to pay the HMRC everything that is owed, including any interest and penalties that you have incurred. The payment will be made using the Payment Reference Number that  HMRC will provide. A deadline will be imposed for the payment, which is usually the same time the disclosure needs to be submitted. A time-to-pay arrangement might also be agreed upon.

We will submit the disclosure for you and your payments if applicable. If HMRC is satisfied with everything that has been submitted, they will issue an acceptance letter. They might also issue a penalty that needs to be paid, but this will be significantly lower than the penalty you would have incurred if you hadn’t made a disclosure. 

The disclosure will be made using whichever facility we deemed best, such as the LPC and WDF that we referenced earlier. When everything is complete, and issues have been resolved with HMRC, we will work with you to make sure that you are fully compliant and exempt from any further tax avoidance issues. We will detail the steps needed for registering for self-assessment if you haven’t yet taken these, and we will help you report your income on your self-assessment tax return. 

Are There Circumstances Where I Won’t Be Charged A Penalty?

As we suggested, the penalty will be reduced if you choose to make a voluntary disclosure. This is better than waiting for the HMRC to catch up with you, as you will be liable for higher penalty charges if they do. 

However, there may be circumstances when you aren’t charged a penalty. If we can demonstrate that you have acted innocently as opposed to carelessley or deliberately, HMRC may suspend the charges that you may have been liable for. They may still impose certain conditions that you need to abide by, but these will be less problematic than a penalty or potential criminal action. 

When Should I Contact You?

If you know or suspect you may have undisclosed taxes to pay, don’t delay getting in touch with us. The longer you wait, the greater the chance that HMRC will catch up with you, and that could make your situation worse. 

We have a proven track record with voluntary and prompted HMRC disclosures and have an understanding of which disclosure facilities will apply to your case. We will make sure you receive the best representation possible and will aim to resolve matters in an efficient and stress-free way