Making a Voluntary Disclosure to HMRC

Many of our clients (or their existing advisors) come to us for help because they have found out that their tax affairs might not be correct, but HMRC are not carrying out an enquiry or investigation (or if they are, they are not currently aware of the particular error).

Typically, the client will want to be sure first of all that there really is something wrong with their affairs. Assuming that an error can be confirmed, they will then ask for our help in approaching HMRC with a view to correcting the error.

It is never appropriate to conceal the situation from HMRC, not least since there are advantages in making the first move (e.g. reduced penalties) and real risks in failing to do so. Where the issues relate to offshore assets and/or income, the ramifications of not making a disclosure could be particularly severe (e.g. very significant penalties arise if such errors are not corrected prior to 30 September 2018). At worst, deliberately concealing known errors could be viewed as criminal behaviour.

Already under enquiry or investigation

In cases where there is an existing enquiry or investigation the HMRC officer leading it will almost certainly be the right point of contact; but even in these cases, care needs to be taken to ensure that the disclosure is made in the right way and at the right time. This will be determined by the particular facts and circumstances so there is no generic ‘right answer’; it will need to be discussed calmly and professionally to determine the right course of action. We often help clients in these situations.

No existing enquiry or investigation

In cases where there is no existing enquiry or investigation, an approach will need to be made in a way which is aligned with HMRC’s published processes for making voluntary disclosures of tax errors.

In recent times, these processes have increasingly been standardised and digitised i.e. the process could be online via the internet using HMRC’s website facilities. Typically, the process requires providing personal identification information and limited information about the matter being disclosed. HMRC will then review the information internally and make contact to agree how the matter should be progressed and resolved. Careful thought needs to be given to the completion of these online processes. If the matter being disclosed may be viewed by HMRC as tax fraud, and/or the issue relates to overseas assets or income, special care needs to be taken. We often help clients in these situations to navigate HMRC’s processes in a way which helps get the best outcome.

If you would like a free, confidential and no-obligation discussion, please contact us.