HMRC’s Worldwide Disclosure Facility (WDF) allows the disclosure of a UK tax liability relating wholly or partly to an offshore issue.
- WDF applies for all tax years up to and including 2019/20
- If HMRC has sent you a tax return for that year or any tax year from 2015/16 onwards which is still outstanding, you must complete the return and you must not include these tax years on this disclosure form.
Once you have notified HMRC, you will have 90 days to:
- Collate the information needed to complete the disclosure,
- Calculate the final liabilities including tax, duty, interest and penalties, and
- Complete the disclosure, using the unique disclosure reference number provided when notifying.
The new Common Reporting Standard (CRS) is now in force, which is an automatic exchange of financial information between countries. Over 100 countries have committed to exchange information on a multilateral basis under the Organisation for Economic Co-operation and Development Common Reporting Standard. The CRS dramatically increases international tax transparency.
HMRC has received information from around 100 countries, under the Common Reporting Standard CRS, on financial accounts held overseas by UK resident taxpayers.
HMRC’s ‘connect’ software allows the collection and analysis of millions of lines of data means you might be susceptible to an investigation, even if you do not realise you have a tax issue.
The Requirement to Correct (RTC) legislation will detect tax irregularities in respect of overseas assets.
Taxpayers should ensure they have correctly reported their UK residence status and domicile status, as mistakes could be costly.
As part of the disclosure, you will have to self-assess your behaviour in relation to your tax affairs, ranging from careless to deliberate and concealed.
HMRC is prosecuting more cases and is now demanding higher penalties for offshore offences (up to 300%).You could be at risk of reputational damage from HMRC’s ‘Name and Shame’ powers. WLH Tax would point out that entering into the WDF does not provide immunity against HMRC embarking on a criminal investigation.