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Contact Us ▪ Introductory Meeting / Quote
Call: 0207 309 2222
The Worldwide Disclosure Facility (WDF) replaces previous disclosure schemes such as the Liechtenstein Disclosure Facility and the Crown Dependencies Disclosure Facilities. The Liechtenstein Disclosure Facility, which closed at the end of 2015, provided UK residents with undeclared tax liabilities a unique opportunity to settle and regularise their tax affairs with HMRC on favourable terms and immunity from prosecution.
The Worldwide Disclosure Facility (WDF), available from 5 September 2016, allows anyone wishing to disclose a UK tax liability relating wholly or partly to an offshore issue. This includes:-
WDF disclosure after 1 October 2018 are subject to the Requirement to Correct (RTC) sanctions which sets out minimum penalties to reflect HMRC’s toughening approach.
FTC penalties for a “prompted” disclosure is generally 200% of the unpaid tax, but can be negotiated down to 150% depending on the quality and accuracy of the disclosure. “Unprompted” disclosures can be reduced down to 100%, again depending on the quality and accuracy of the disclosure.
FTC will not necessarily apply to all years and there are complex rules for determining how many years may be assessed and the rates of penalty chargeable.
Moreover, HMRC have confirmed an inaccurate or incorrect disclosure may lead to a civil intervention or criminal prosecution. It is therefore important to appoint a qualified professional with the relevant experience in dealing with such cases. Jeffreys Henry LLP has significant experience in dealing with HMRC investigations and disclosures, including the current WDF (opened on 5 September 2016) and previous the Liechtenstein Disclosure Facility (closed in 31 December 2015).
The WDF will not be appropriate in every case and in more serious cases an alternative approach may need to be adopted.
The launch of the WDF is linked to the implementation of the Common Reporting Standard (CRS), an international initiative where over 100 countries will exchange tax payer information on a multilateral basis. The aim of the CRS is to crack down on the use of offshore jurisdictions to facilitate tax evasion. As a result of this, many UK residents with undisclosed offshore assets are being contacted by HMRC to disclosure under the Worldwide Disclosure Facility.
In recent months, HMRC has issued letters to individuals are believed to have offshore income and gains that could be liable to UK tax. Last month (August 2020), HMRC began issuing ‘nudge letters’ to UK residents with potential tax liabilities on overseas income or gains. This latest batch of letters specifically targets UK residents with a financial connection to India, such as those that hold a high-yield rupee deposit account or a NRI fixed term deposit account.
Attached to the letters is a ‘Certificate of Tax Position’. This instructs individuals to sign a statement stating that either their tax affairs need to be brought up to date through the Worldwide Disclosure Facility (WDF), or they have correctly declared all their worldwide income and gains. The consequence of making an incorrect Certificate of Tax Position declaration could be severe.
Tax Partner - Tax Investigations & Disputes
Personal Tax Manager
Tax Associate
Jeffreys Henry LLP has significant experience in dealing with HMRC investigations and disclosures, including the current WDF (opened on 5 September 2016) and previous the Liechtenstein Disclosure Facility (closed in 31 December 2015).
16 December 2020
HMRC collected £34 million in penalties in September 2020, an increase of 62% from a low of £21m in May, after resuming tax investigations. After temporarily […]
27 October 2020
Earlier this month (October 2020), HMRC issued “nudge letters” to the corporate owners of high value UK property with outstanding ATED (Annual Tax on Enveloped Dwellings) returns.
5 October 2020
HMRC are targeting UK residents that hold high-yield Rupee deposit account or NRI fixed-deposit account in India. In the latest batch of letters is a ‘Certificate of Tax Position’ prompting those with undeclared assets in India to declare under the Worldwide Disclosure Facility (WDF).
5 October 2020
Airbnb have paid an extra £1.8m in UK tax following a HMRC investigation, in addition to a £1.1m tax bill paid on profits of £5.6m by Airbnb UK in 2019.
11 December 2019
What are HMRC doing? HM Revenue & Customs have launched an investigation into overseas landlords who may be avoiding paying the correct amount of tax. Owners […]
1 November 2019
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9 October 2019
Throughout 2018 and 2019, HMRC sent the large batch of ‘Let Property Campaign’ letters to landlords and other Buy-to-Let investors with undeclared rental income. This wave […]
12 August 2019
UK investors in Bitcoin and other cryptocurrencies are being warned to check whether they are liable for Capital Gains Tax (“CGT”). It has been reported that […]
29 July 2019
Thousands of landlords with undeclared rental income have used the Let Property Campaign to come forward and regularise their tax affairs on favourable terms. An analysis […]
19 July 2019
An analysis of HMRC data has revealed over £42 million has been recovered from landlords with undeclared rental income in 2018-19, double the £21 million recorded […]