Over 100 countries have committed to exchange information on a multilateral basis under the Organisation for Economic Co-operation 
and Development Common Reporting Standard (CRS). The CRS was created to increase international tax transparency.
On 31 December 2015, all HMRC offshore facilities closed. Up to that date, HMRC gave incentives to encourage people to come forward and clear up their tax affairs. That’s no longer the case, but before automatic exchange and new sanctions come into force, the Worldwide Disclosure Facility (WDF) will be the final chance to come forward before they use CRS data and toughen our approach to offshore non-compliance.
The Worldwide Disclosure Facility opened on 5 September 2016. After 30 September 2018, new sanctions under Requirement to Correct will be introduced that reflect HMRC’s toughening approach. You can still make a disclosure after that date but those new terms will not be as good as those currently available.
It can be used by anyone who wants to disclose a UK tax liability that relates wholly or partly to an offshore issue can use the facility. An offshore issue includes unpaid or omitted tax relating to:
- income arising from a source in a territory outside the UK
- assets situated or held in a territory outside the UK
- activities carried on wholly or mainly in a territory outside the UK
- anything having effect as if it were income, assets or activities of a kind described above
It also includes funds connected to unpaid or omitted UK tax not included above, that you’ve transferred to a territory outside the UK or are owned in a territory outside the UK.
If at any time HMRC knows or suspects that assets or funds included in your disclosure are wholly or partly made up of criminal property, they have discretion to refuse your application to participate.
From last week HMRC will allow taxpayers using the facility will be allowed an additional 90 days to make a disclosure in particularly complex cases where tax is unpaid. However beaware you’ll only get the full 180 days to complete the process rather than the current 90-day window in certain circumstances and you must agree the extension with HMRC in advance and register for a disclosure reference number (DRN). Our team can assist with this.
For the worldwide disclosure facility, where an individual has been issued with a tax return for any tax year from 2013-14 which remains outstanding, the return should be completed and income for those years excluded from the disclosure. For the card transactions disclosure programme, where a company has outstanding tax returns, it should file all outstanding returns that are within 4 years from the end of the accounting period and income for earlier years included in the disclosure. More information can be found on the .Gov website.
Our team has experience of working with clients who need to make a tax disclosure. We’ve made sure that they’ve followed the process correctly and negotiated time to pay arrangements for them. Take a look here to see how we could help you or your clients in this position or give us a call to discuss.
