HMRC have announced the Worldwide Disclosure Facility (WDF) the latest in a long line of disclosure facilities designed to encourage taxpayers to come forward to disclose previously unreported offshore tax liabilities.

Unlike its predecessors, the WDF does not offer any favourable terms, other than the fact that HMRC state that where the disclosure is correct and complete and the taxpayer fully co-operates by supplying any further information they ask for to check the disclosure, they’ll not seek to impose a ‘higher penalty’, except in specific circumstances (e.g. where the taxpayer was already under enquiry) and they will also agree not to publish details of the disclosure. This last ‘benefit’ may appeal to higher profile individuals who may prefer to remain anonymous in their previous failures.

This is a marked difference to previous disclosure facilities that offered much reduced penalties (such as the 10% rate offered by the Liechtenstein Disclosure Facility) and guarantees against prosecution.

The WDF is targeted as a ‘last chance’ by HMRC before even more strict penalties come into force, as well as their claims that automatic exchange and data from the Organisation for Economic Co-operation and Development Common Reporting Standard (CRS) will then be available.

After 30 September 2018, new sanctions will be introduced that reflect HMRC’s “toughening approach”. They state that you will still be able to make a disclosure after that date “but those new terms will not be as good as those currently available”.

Previous experiences suggest that making a disclosure under one of HMRC’s facilities is usually a more streamlined process compared to simply writing to HMRC.

Eaves and Co would be very happy to discuss matters if you are concerned that you or your clients may have an undisclosed offshore liability, suitable for the Worldwide Disclosure Facility. We have extensive experience of making disclosures under previous facilities that HMRC have offered.

Hello,

1)      Sorry for the informality of the greeting but if you were doing a training exercise on fake bombs and security, would you not (at least) count up the number of imitations you had hidden – and then count them back in to avoid scaring/annoying 75,000 people?  See Manchester United and fake security issue?

2)      Secondly, if you were trying to convey ‘good news’ about the ‘initiative to automatically exchange information on beneficial ownership’ (See HM Treasury Press Release), there may be ‘marginal’ concern about the absence of countries [on HM Treasury List dated 13 May 2016] such as China, Russia and the USA (for example)

3)      Thirdly, by definition, dishonest people are going to tell lies, especially if they can get away with it.  Hence, how (for example) is a relatively poor country (say the UK (?)) going to enforce disclosure?

HMRC have announced that they intend to introduce a new powers making it easier for them to prosecute failure to declare untaxed offshore assets.

At present, HMRC need to prove that individuals who have undeclared offshore income has intent to evade tax, in order for a criminal conviction to be successful.

Under the proposed new plans, HMRC would only have to show that the income was taxable and undeclared.  A consultation will be published but the plans have not progressed this far yet.

These new proposals continue the recent trend to come down hard on offshore tax evasion and mean that anyone with undeclared offshore assets would be at risk of criminal prosecution.  Affected individuals may wish to consider using one of the numerous offshore disclosure facilities currently available, before it is too late.

Eaves and Co have assisted with numerous offshore disclosures and would be happy to help if you have concerns.

The news that WikiLeaks has been provided with details of Swiss bank accounts by a former bank employee may be of concern to UK taxpayers who have foreign banking undisclosed to HMRC.

The fact that information can be leaked from banks coupled together with mutual agreements between governments, highlights the importance of voluntary disclosure before being “caught” by HMRC. 

The Liechtenstein Disclosure Facility (LDF) currently represents an excellent way to make a voluntary disclosure.  Individuals with assets in any other offshore location may be able to participate in the LDF by moving some assets into Liechtenstein.

The LDF can provide a significant reduction in the level of penalties and a reduced window of reporting requirement: usually unreported income from 20 years ago must be disclosed, however this is reduced to 10 years under the LDF.

Eaves and Co Specialist Tax Advisers have successfully completed robust disclosures under the LDF and are in the process of preparing a number of other disclosures.  If you require advice in confidence regarding such matters call our Leeds office on 0113 244 3502, asking for Paul Davison.